A savings rate that looked competitive at opening can fall within weeks of a change in policy rates. The account terms permit this because the rate was never a promise about the future.
The deposit rate is set against the bank's alternatives
A bank pays for deposits in order to fund lending or to place the money in short-term instruments. What it can earn on those uses sets the ceiling on what it will pay.
When short-term policy rates move, the return available to the bank moves almost immediately, because much of the balance sheet reprices quickly.
The deposit rate follows, since paying materially more than the bank can earn turns each additional dollar of deposits into a loss.
Variable accounts carry no rate commitment
The terms of a variable savings account allow the institution to change the rate at any time, usually with notice but without the customer's agreement.
That is the structural difference from a certificate of deposit, where a rate is fixed for a term in exchange for the depositor giving up access.
A depositor holding a variable account is therefore lending at whatever rate prevails, which is why comparing headline rates without checking the structure is misleading.
Increases and decreases travel at different speeds
Banks generally pass rate cuts through to savers promptly and pass increases through more slowly, which is a well-documented asymmetry in deposit pricing.
The reason is that most depositors do not move. Inertia allows an institution to retain balances while paying less than the market would require to attract new ones.
This is also why the best available rate is frequently offered on a new product rather than applied to the existing account holders of the same bank.
Online banks compete harder because their costs are lower
An institution without branches has a lower cost base per dollar of deposits and can pay more while earning the same spread.
Its depositors are also more rate-sensitive by selection, since they sought the account out rather than inheriting it from a local relationship.
That combination keeps online rates closer to short-term market rates and makes them more responsive in both directions than branch-based accounts.
Teaser structures separate the headline from the reality
Some accounts pay a promotional rate for an introductory period, or pay the advertised rate only up to a balance cap or on new money.
The blended return over a year can be well below the advertised figure once the promotional window closes and the balance reverts to the standard rate.
Because the rate is variable in any case, the practical approach is to check the applicable rate periodically rather than relying on what was offered at opening.