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Fiscal Cliff Deal Will Send Interest Rates Higher Eventually

Fiscal Cliff Deal Will Send Interest Rates Higher Eventually

Democrats and Republicans have a lot of work ahead of them figuring out how to deal with the nation's debt. Figuring out a budget for the coming year along with increasing the debt ceiling are on the horizon over the next two months. Many economists believe this is the last polical issue holding back the economy.

Once the details are figured out on the debt economic growth will accelerate leading to higher inflation and higher interest rates on all types of deposit accounts including savings accounts and money market accounts. When these exactly happens no one knows at this point but savings account rates and money market rates will increase either in late 2013, 2014 or in 2015.

Current savings rates at banks are averaging a paltry 0.07 percent in the Federal Deposit Insurance Corporation's Weekly Rates and Rate Cap Survey for the week ending December 31, 2012. Jumbo savings account rates in the FDIC survey for the week that ended on December 31 are also averaging 0.07 percent.

Money market account rates in the rate survey are faring a little better than average savings rates. Current money market account rates are averaging 0.11 percent and jumbo money market rates are averaging 0.17 percent. The best savings rates and best money market rates are thankfully higher than the average rates.

Right now the highest savings account rates on our rate list are at 1.00 percent and the highest money market rates are just over 1.00 percent at 1.04 percent. You can search for the highest account rates by using our rate tables for both savings accounts and money market accounts.

Author: James Martin
January 4th, 2013