Interest rates have skyrocketed. So why hasn't the rate on your savings account budged?

As anyone with a mortgage can attest, the cost to borrow money has gotten a lot more expensive this year. Banks were swift to pass on the rate hikes the Bank of Canada implemented as part of its aggressive campaign to tame inflation.

Variable rate home loans routinely top five per cent right now, more than twice what they were a year ago.

But the same can't be said of savings accounts, which are not paying out much more today than they were a year ago, when the Bank of Canada's lending rate was 0.25 per cent — its lowest level on record.

Canada's five biggest banks offer a basic savings account with a rate paying between 0.01 and 0.035 per cent at the moment. So, if you are saving $1,000 for a year, you could earn a grand total of 10 to 35 cents in interest.

Even their so-called high-interest savings accounts that come with minimum balances and other stipulations all pay less than two per cent on an annualized basis.

CBC News reached out to Royal Bank, TD Bank, CIBC, Scotiabank and the Bank of Montreal this week, asking for an explanation as to why savings account rates seem to be slow to rise while lending rates do not, and all the responses were versions of a similar theme: that their rates are based on a variety of funding costs, and while rates on savings accounts are competitive, customers can often get higher rates with products such as GICs that lock in their money for a longer term.

Natasha Macmillan, director of everyday banking with rate comparison website Ratehub.ca, says consumers are keenly aware of that gap between what's happening to the rates on what they owe versus what they have to save.

"As soon as the Bank of Canada raises their interest rate, we see that being translated immediately on the borrowing side," she told CBC News in an interview. "But it does take a little bit slower for it to be translated to the high-interest saving side — not quite as quickly [and] not quite at the same rate."

It didn't used to be that way. While there's almost always a gap between what banks charge to borrow money versus what they offer to savers, the spread is more in favour of the banks today than it's ever been.

In 1981, when Canada's inflation rate peaked at more than 12 per cent, savings accounts were paying out 19 per cent interest. As recently as 1990, inflation was roughly five per cent, and savings accounts were paying out almost twice that.

WATCH | What a rate hike in 1979 meant for Canadian savers: 

That's not happening today, and there are a few reasons why, says Claire Celerier, a professor of finance at the Rotman School of Business at the University of Toronto.

The first one is that the banks have a lot of deposits on their balance sheet; in their quarterly earnings being released this week, the big banks reveal that they have hundreds of billions of dollars of consumer deposits on their books. 

While banks are subject to higher borrowing costs themselves, customer deposits make up about two-thirds of their funding source. Right now, with plenty of deposits to satisfy their needs, they have very little incentive to try to convince people to give them more.