Walk into any bank branch in America this week and ask what they're paying on a basic savings account.
The number you get back will likely start with a zero and end with a decimal.
Meanwhile, the same institution is lending your money out at rates that would make a loan shark blush.
This is the quiet arithmetic of the Federal Reserve's interest rate policy, and it has quietly become one of the great moral scandals of American daily life.
When the Fed raises rates to fight inflation, banks are quick to charge borrowers more.
They are remarkably slow to pass those same rates along to the people whose deposits make the whole system possible.
Consider what has happened over the past two years.
The Fed pushed its benchmark rate to the highest level in more than two decades.
Credit card APRs climbed past 20 percent.
Mortgage rates doubled from their pandemic lows.
Every one of those increases showed up on your statement within a billing cycle.
Now look at the other side of the ledger.
The average savings account still pays somewhere around half a percent, according to the FDIC's own national rate data.
Money market accounts and high-yield online savings vehicles do better, but millions of Americans, especially older ones, keep their cash parked at the same brick-and-mortar bank their parents used.
The gap between what banks earn and what they pay depositors has a name in finance: net interest margin.
And in recent quarters, that spread has been historically wide.
Banks are booking record net interest income while telling customers that "market conditions" prevent them from paying more.
There is nothing illegal about any of this.
The Fed sets the price of money, but it does not force banks to share the bounty with the people who supply the raw material.
Regulators could require clearer disclosure of the spread.
Neither has happened, and neither is likely to.
What we get instead is a two-tier system.
The financially sophisticated move their cash into Treasury bills and money market funds within minutes.
Everyone else, the retiree in Ohio, the single mother in Arizona, the kid with his first paycheck, earns almost nothing while their bank profits from their inertia.
It is a story about a system that rewards those who already understand the rules and quietly taxes those who don't.
The Fed's rate decisions dominate headlines, but the real damage happens in the fine print of a savings account nobody reads.
The next time the Fed announces a rate hike, watch how fast your credit card rate moves.
Then watch how long it takes your savings rate to budge.
Final Thoughts
The difference between those two speeds is the price of being an ordinary American depositor.