I get that maybe this is a really dumb question.

High interest as I understand it just means that debt is more expensive for individuals and institutions.

But on a higher order, it means that banks are more hesitant to give out loans unless they are high interest, because when interest is high they can get higher returns from lower-risk investments. They need higher returns on mortgages and small business financing in order to justify the risk.

In theory, shouldn't that mean that my current assets, even the low-interest savings account I use for emergencies, should be generating more interest these days than a few years ago? My deposits are, in theory, earning the bank more money, correct?

I could go check for myself but the balance has fluctuated a lot in the last five years so it would be hard to get any meaningful data there.