system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why do big banks refuse to raise their interest rates for savings accounts? Is there no incentive to at least coming close to the 2-3% online banks offer?
gpt
Banks offer interest on savings accounts to attract customers to deposit money, because then the bank can loan that money out to someone else for a higher rate.

Banks are flush with cash right now, and fewer people are looking for loans. They don't need more cash.

Before the pandemic excess cash reserves of US banks hovered around $1.5 trillion. At the start of 2022 excess reserves were more like $4 trillion. WAY more cash than they need. Right now that number has dropped closer to $3 trillion as the result of the Federal Reserve's efforts to combat inflation. That's better, but still higher than it should be.