Getting A Bang For Your Buck

Here's the silver lining of the mortgage mess: those cash-strapped banks are raising the rates they pay on certificates of deposit and money-market accounts to bring in more green. Why not lend them some money and pick up some safe FDIC-insured returns?

For example, Countrywide Bank ( is currently offering 5.55 percent interest on a six-month CD and 5.65 percent on a one-year CD. AmTrust Direct ( is paying 5.3 percent on its money-market deposit account. That's better than the rates being offered by most money-market mutual funds these days, and way more stable than anything this year's stock market might hand you.

You can compare rates at or, but go to individual bank Web sites, too, as the rates listed there can be better than the ones at secondary sites.

Also, check with your broker: most online and full-service brokers can get top CD rates and pass them on to you. Brokers can split your money among several banks, and that's good if you want to stash big money. FDIC insurance still limits nonretirement accounts to $100,000 of coverage—and that covers everything you have in an individual bank, including your checking account.

Even if you have less than the top insured amount at one bank, it may pay to split up your money and buy several CDs at that bank. That strategy, called a "CD ladder," can help you squeeze out higher rates while keeping some of your money liquid. Here's how to do it: Buy a three-month, a six-month, a nine-month and a one-year CD, and then convert each to a one-year CD as it comes due. Once you've done that, you can just roll over each one-year CD into another one-year CD. You'll be earning one-year returns but be in a position to catch rate hikes as they come along. And you'll have some of your money coming back at you every quarter in case you decide to put it back in the stock market, or blow it on a big-screen.