When you're evaluating savings options, consider the interest rate and whether or not you'll be able to withdraw your money when you need it (and at what cost). If the focus is on getting the best interest rate, go to Bankrate.com to compare rates on one- to five-year CDs. Banks are eager to attract deposits to shore up their balance sheets, so there are more high-yield CDs available than ever.
The average overnight rate on a one-year CD stands at almost two-and-a-half percent and climbs to almost three percent for a five-year commitment. Just be aware that if you go with a CD, you'll pay a penalty if you have to pull out your money before the certificate comes due.
If you’d rather not have your money locked in, consider a money market deposit account (which is different from a money market fund). There are some high-yield options available, especially from online banks, and Bankrate.com
ranks those as well.
Nestpert Pam Krueger, cohost of MoneyTrack on PBS and author of The MoneyTrack Method
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