For TD, the effect of such a small increase can be quite substantial. TD has been taking action to increase its sensitivity to an interest rate hike TD has been expecting an interest rate hike from the U.S. for years, and in 2013 it started taking action to make sure its franchise was poised to get the maximum possible benefit from a rise in rates. As just mentioned, TD benefits from rising interest rates by seeing its net interest income grow—that is to say, the difference between the interest TD receives from its loans and investments and the interest TD pays out to depositors. Rising rates means TD will get more income from loans and investments. Because deposits are usually very short term and the bank lends out and invests in longer time frames, the bank's interest income will grow at a faster rate than interest expenses when rates rise, leading to a boost in earnings. In 2013 TD started selling longer-term securities (like U.S. treasuries) and re-invested them in shorter-term securities.