It appears that low interest rates are going to be sticking around for a while. This makes it an opportune time to get as much of a return on your bank deposits and the best cd rates as you can. Lately, bank deposits are paying out more than money-market funds. However, unlike all these mutual funds, your deposits are federally insured. There are a few steps that you can take to increase the money you are making on your deposits.
Keep an eye on websites that regularly monitor high yield accounts, just so you know what to expect at any given time. There are plenty of sites out there; something like bankrate.com should be sufficient. Also search online for high-yield bank CDs. A number of great offers should come up immediately. Be cautious since some of them might be a scam or may not be based in the US. Verify their legitimacy through the FDIC. Their website is the easiest way to do this. Just put in their name and you will find out if they are a real company. No matter what if you are doing business online, make sure you are cautious. If something sounds too good to be true, it probably is.
You can also look into an account with a credit union. They tend to offer higher yields than banks. No matter what account you choose, try using a laddering strategy to earn higher yields over time. This involves staggering your maturities. For example, if you have $10,000 to invest don’t put it all into a 5-year CD account. But some in a one year, some in a two year and so on until you run out of money. Then you have a CD account that matures every year for a number of years. Over the long term, you will get a higher return this way.
If rates start to rise, stick only with short term CDs. When the rates are relatively stable, this is the time to invest in long term CDs. This way if the stable rate starts to fall, your rate is locked in no matter what. But if the rates are continuing to rise, you capture it on its way up with the short-term accounts.
