When a central bank raises rates, borrowing costs adjust quickly while savings rates crawl upward over months. The asymmetry is a business decision rather than an administrative delay.
Deposits are a cost the bank controls
A bank funds lending largely with customer deposits, and the interest paid on those deposits is one of its largest expenses.
Loan rates are typically linked to reference rates and reprice mechanically, whereas deposit rates are set by the bank at its own discretion with no obligation to follow anything.
The gap between the two is where much of a bank's margin comes from, so slow deposit repricing directly widens profitability during a rising rate cycle.
Inertia is priced in
Most depositors do not move money in response to modest rate differences, because the effort of switching outweighs the gain on a typical balance.
Banks model this behaviour and pay only enough to retain the balances they need. Raising rates for everyone in order to retain the small share who would leave is expensive and unnecessary.
This is why the highest advertised rates appear on new accounts rather than existing ones. New money is competed for; existing money is assumed to stay.
Not all deposits are equally sticky
Current accounts holding transactional balances rarely move, since the account is tied to salary payments and direct debits, and they are often paid almost nothing.
Rate-sensitive savings balances behave differently and move readily, which is why they receive better rates and why banks watch their outflow closely.
The distinction explains why a single institution can simultaneously offer a competitive rate on one product and a negligible one on another.
Falling rates reverse the asymmetry
When policy rates fall, deposit rates tend to drop quickly while loan rates are slower to follow, which protects margin in the opposite direction.
The pattern is consistent across cycles because the bank controls the timing on the side that benefits it, and competition constrains it only where customers are actually willing to move.
Products with rates guaranteed for a period are an exception, since the bank has committed contractually and cannot adjust until the term ends.
What the lag means for a saver
An account left untouched for years is likely paying substantially less than the same institution offers on its current products, without any notification having been misleading.
Comparing the rate actually being received against the best widely available rate takes minutes and is the single check that captures most of the available difference.
Because the gap is largest during and after a rate-rising cycle, that is exactly when reviewing existing accounts produces the biggest improvement.