Higher Savings Rates Might Be Here Sooner Than We Think

George Soros, Chairman of Soros Fund Management and a legendary financier, believes interest rates will spike higher in 2013. This is a lot sooner than the end of 2015 - the timeframe in which most investors believe rates will remain low. Most investors believe rates will stay low until then because the Federal Open Market Committee's stated policy is to keep rates low until the end of 2015.

Soros was interviewed by CNBC's Maria Bartiromo, at the World Economic Forum in Davos. In the interview he said "once the economy gets going, then interest rates are take a big leap."

He also said "It may already have begun, actually. It shows some signs. And I think it's most likely to happen  this year, once you are past the uncertainty about the budget the and investment decisions are made-- I think you'll see it."

As we all know, George Soros is no ordinary investor. If he believe interest rates will spike considerably higher this year then it's quite possible. The main factor that needs to happen to make this a reality is a lower unemployment rate which is currently at 7.9 percent.

The Fed has recently stated they plan to keep suppressing interest rates until the unemployment rate falls below 6.5 percent. The Fed recently released new economic projections showing that most of its senior fed officials did not expect to reach the goal of 6.5 percent unemployment until the end of 2015.

Who is right, the FOMC or George Soros? We will soon find out. The good news is higher interest rates will eventually be here after years of excruciatingly low rates. Higher rates before the end of 2015 is welcome news for holders of interest-bearing assets such as savings accounts and money market accounts.

Before the financial crisis and "Great Recession," investors could find savings rates and money market rates in the 3 to 5 percent range. Right now the best savings rates are at 1.00 percent and the best money market rates are just above that at 1.04 percent.