Banks are slow to increase rates on savings accounts, but quick to reduce them
The problem is that most people don't want to change banks.<p>If changing your bank to get a better savings rate took 15 minutes and had no other consequences, banks would be updating their rates by the second to beat one another. But it doesn't. If your mortgage, credit cards, car loan, etc, are all with the same bank then switching your bank account only just to get 0.1% higher interest is a huge hassle for little benefit. Especially if you don't have much money sitting in a savings account- even with $5000 in your account, a 0.1% difference is $5/year.<p>So what banks are actually competing over is the people who happen to be shopping around for a new bank- something most people do only a handful of times in their life. Meanwhile, leaving rates low improves the banks bottom line. Short term vs long term tradeoffs.<p>In short: banks have little reason to raise savings account interest rates regardless of what their central bank gives them.