Nominal interest rates and bank deposit behaviour: A systematic review of transmission mechanisms, institutional conditions, and evidence fragmentation

This review examines how nominal interest rates are associated with bank deposit pricing, mobilisation, substitution, and stability. Searches of Scopus and Web of Science, executed on 31 July 2026 for publications from 1976 through 2025, yielded 197 records. After 69 duplicates were removed, 128 records were screened, 118 full texts were assessed, and 99 studies entered the bibliographic census. A focused mechanism-synthesis core comprised 45 studies: 40 census studies and five explicitly identified 2026 early-access articles. Screening, extraction, and evidence characterisation were conducted by one analyst. The evidence supports three conditional propositions rather than a universal interest-rate rule. First, deposit-rate pass-through varies with market structure, product characteristics, and regulatory constraints. Second, inflation and exchange-rate instability can dominate the nominal-rate signal by altering real returns, currency choice, and confidence. Third, institutional design—including Islamic return-sharing arrangements, payment systems, and depositor protection—changes both the meaning and the transmission of nominal rates. These mechanisms remain difficult to compare because studies use heterogeneous deposit outcomes, rate measures, samples, and estimators. The review therefore contributes an auditable evidence map and a mechanism-oriented research agenda, not a pooled causal estimate.