# Deposit Beta

*Banking & Payments — Finicade finance glossary*

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.

**Also known as:** deposit repricing, pass-through rate

**Related terms:** [Net Interest Margin](https://finicade.com/glossary/net-interest-margin), [Commercial Bank](https://finicade.com/glossary/commercial-bank), [High-Yield Savings Account](https://finicade.com/glossary/high-yield-savings-account), [Federal Funds Rate](https://finicade.com/glossary/federal-funds-rate), [Wholesale Funding](https://finicade.com/glossary/wholesale-funding)

Source: https://finicade.com/glossary/deposit-beta