Sticky vs fast-mover HYSAs — how online banks really react to Fed cuts

When the Federal Reserve adjusts the federal funds target, online high-yield savings accounts do not all move in lockstep. Some banks pass the change through within a week. Others wait a month or more, hoping that depositors will not notice the gap between their account and the rest of the market. The difference between the fastest mover and the slowest can be 30 to 50 basis points sustained over the months between Fed decisions — real money on any meaningful balance, and a reason worth understanding before you sit on a stale account that is silently underpaying you.

This piece walks through why the lag exists in the first place, who tends to be a fast mover and who tends to be sticky, the math that tells you when a switch is worth your time, and the operational realities that make the switch less painful than most savers expect.

Why the lag exists at all

A bank’s deposit APY is not directly tied to the federal funds rate by regulation or contract. It is a price that each bank sets, constrained on the upper end by what they earn on the assets the deposits fund — Treasuries, agency mortgage-backed securities, short-term corporate paper, all of which reprice off the same general rate environment — and constrained on the lower end by what the bank thinks its depositors will tolerate before leaving.

Both constraints respond to a Fed cut, but on different clocks. The asset side reprices quickly: a Treasury bill matures and the new one yields less, immediately compressing the bank’s net interest margin. The depositor side reprices slowly: most savers do not check their APY weekly, and many do not check it at all between annual budget reviews. The gap between the two clocks is the bank’s window to widen its margin at the saver’s expense.

A “sticky” bank exploits that window as much as it can without losing too many depositors to attrition. A “fast-mover” bank prices to keep its APY competitive in the public comparison tables, accepting a thinner margin in exchange for inflow of new deposits and lower churn of existing ones. Neither is right or wrong as a business model — but as a saver, you want to know which type you are banking with.

The empirical pattern in the last two Fed cycles

Without naming individual institutions (rates change weekly and any specific number on a published page can be stale by next month), the general pattern across the 2024–2025 cutting cycle and the 2019–2020 cycle looked like this:

• Fast movers (typically newer fintech-adjacent online banks and the more aggressive direct banks) tended to cut their published APY within one to two weeks of an FOMC decision, by roughly the same magnitude as the Fed cut. A 25 basis point Fed cut produced a 20–25 basis point HYSA cut at these institutions, often within ten business days.
• Mid-pack movers (most established online banks owned by larger holding companies) cut within three to six weeks, by 15–25 basis points per 25 basis point Fed cut.
• Sticky banks (the savings arms of legacy retail banks, plus a handful of online banks with very large customer bases and low churn) sometimes waited six to ten weeks, occasionally cut by less than the full Fed move, and in a few cases simply let the cut compress their margin for a quarter before passing any of it through.

The pattern reverses on hikes — sticky banks are slow to raise APY when the Fed raises rates, fast movers raise quickly. So the institution you choose for “fast cut, slow hike” is not the same as the one you choose for “fast hike, slow cut.” If you only optimize for one direction you are leaving money on the table during the other.

Bank type	Cut lag	Hike lag	Net effect over a rate cycle
Fast mover	1–2 weeks	1–2 weeks	Tracks the market closely
Mid-pack	3–6 weeks	4–8 weeks	Slight asymmetry, lag in your favor
Sticky	6–10 weeks	8–12 weeks	Bank captures NIM spread in both directions

The switching math

Whether a switch is worth your operational time depends on three numbers: your balance, the APY gap between your current bank and a credible alternative, and how long the gap is likely to persist before the laggard catches up.

For a balance of $20,000, a 40 basis point APY gap (the typical spread between a sticky bank and a fast mover during a cutting cycle) is $80 per year of pre-tax interest. That number doubles to $160 per year on $40,000 and quadruples to $320 per year on $80,000. After federal income tax — savings interest is taxed as ordinary income at your marginal rate, with no state tax preference — the after-tax delta on $20,000 is closer to $55–60 at a 22% marginal rate, $50 at 24%, $47 at 32%.

The break-even against the time cost of switching depends on your hourly value of admin time. Setting up a new HYSA, linking your existing checking account for transfers, moving the balance, and updating any direct-deposit splits or autopay routings takes a careful saver two to three hours of focused work spread across a week or two (since the trial micro-deposits for account linking take one to three business days to clear). At an implicit hourly rate of $30, that is $60–$90 of time cost. The switch pays for itself in the first year on $20,000+ balances at typical APY gaps. On $50,000 or more it pays for itself in two to three months.

The other variable is how long the gap will persist. If a sticky bank is two weeks behind a Fed cut and likely to catch up by the next FOMC meeting six weeks out, the temporary gap on $20,000 is roughly $12 — not worth a switch. If the gap is structural (the sticky bank has been 30+ basis points below the market consistently for the last four FOMC cycles), it is a permanent tax on holding cash there.

How to tell which kind of bank you are with

There is no public registry that classifies online banks by their reaction speed. The signal is in the published APY history, and most banks do not publish theirs. A practical proxy:

• Bookmark your current APY today, in your bank’s own rate disclosure page, with the date.
• Bookmark two credible alternatives the same way — pick from the top tier of FDIC-insured online banks tracked by a comparison aggregator you trust, but go to the bank’s own page to read the rate, since aggregators can be a few days stale.
• After the next FOMC meeting (the schedule is at federalreserve.gov/monetarypolicy/fomccalendars.htm), re-check all three on day 1, day 14, day 30, and day 60. The bank that moves first and by the most is your reference fast-mover. The bank that does not move at all by day 60 is your reference sticky.

After two FOMC cycles of doing this, you have empirical data on your specific bank’s behavior. From the third cycle onward, you can predict where you will be relative to the market and decide proactively.

Operational reality of the switch

The largest psychological friction to switching banks is the perception that “moving my emergency fund” is a high-stakes maneuver. In practice, between FDIC-insured online banks with comparable user interfaces, the move is closer to “update an autopay” than “refinance a mortgage.”

The mechanics: open the new account online (15 minutes for the application, identity verification is usually instant via SSN match against credit bureau records). Link your existing checking account by entering the routing and account numbers and confirming two trial deposits that hit in one to three business days. Pull the balance from your current HYSA to the new one via an ACH transfer initiated from the new bank’s side (usually free, typically arrives in one to three business days). Update any direct-deposit splits that previously went to the old HYSA. Leave $0.01 in the old account for sixty days in case any sweep or autopay still references it, then close.

Total elapsed time: about ten days from application to fully settled. Total of your time involved across those ten days: roughly two hours.

Where the analysis stops

This piece is about post-Fed-cut behavior on the savings deposit side. It is not a recommendation of any specific bank by name, since the right answer changes quarterly. The methodology — sticky vs fast mover, the switching math, the empirical check at the bank’s own rate page — is the durable part. The right bank for you today may not be the right bank for you next March. Repeat the check after each FOMC cycle and the answer keeps itself current.

The Federal Reserve publishes its FOMC calendar a year in advance. The next decision date is on the FOMC calendars page at federalreserve.gov. Bookmark it, set a calendar reminder two weeks after each meeting to re-check your APY, and you will know within sixty days whether your bank is doing right by you on rates.