Bankvibe has a good roundup of 12 month high yield CD rates above 1.75% APY.
A few years ago, 1.75% APY was laughably low, but now it's pretty good... The offers they tracked down are from fairly obscure banks and credit unions, but as long as your deposit is FDIC insured, who cares?
A certificate of deposit is something you open up and ideally leave alone -- at least for the 12 month term of the CD, and possibly even longer if you decide to renew. You don't need to login to the bank's web site every day or do complex functions (such as debit card transactions, ATM withdrawals, etc.) so it doesn't really matter if the bank is tiny and far away from you. As long as you see that FDIC insurance logo when you sign up, your money is safe, so you might as well chase the best rates.
My personal take: if you are a compulsive spender, a CD can be a great way to "lock up" your money for a predetermined period of time... and it allows you to earn typically more than you could with a high-yield liquid online savings account (for sake of comparison, ING Direct's Orange online savings account currently offers a 1.10% APY).
If you want to be more aggressive with your money, however, I recommend you start by fully funding your Roth IRA -- put the money into a well diversified range of stocks, or an ETF that represents an industry you feel will do well over the next 6 months. In my opinion, energy and the financials sector are both good candidates for that, but that's the subject for another article altogether.
Not professional investment advice; always consult a financial advisor before making any serious investment decision. Bank rates and terms DO change from time to time -- information on this post believed to be accurate at time of publication, but check the bank's site for most recent CD rate and terms information. No guarantees or warranties whatsoever are associated with content found on Credit Card Outlaw.
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