Deposit Beta
Also called: deposit repricing, pass-through rate
Deposit beta measures how much of a policy rate rise a bank passes on to depositors. A beta of 0.3 means a 1% hike lifts deposit rates by 0.3%. Low betas are hugely profitable and rest entirely on customer inertia, which is why online banks with high betas are a competitive threat. Betas rise sharply once depositors start paying attention — the dynamic behind the 2023 deposit flight.