A Better Rate

At this point, your bank savings account probably looks like your checking account with a few extra pennies thrown in. The amount of interest earnings isn’t adding up to much, thanks to lowered interest rates in a shaky economy.

But all hope isn’t lost. Smart savers who want to have more money on hand when the crisis is past have a non-bank option for savings—especially if you’re investing in CDs. Just in case you think a CD is that thing you used to buy before you began downloading from iTunes, let us help you out. A certificate of deposit, or CD, is a fixed amount of money you save for a specific time period. CDs typically earn a higher interest rate than regular savings.

Unfortunately, bank issued CDs have lousy returns these days—2.77% for a five-year CD— but a credit union can offer 4% or more for one-year certificates. The catch? You have to join a credit union and they are not as prevalent as banks, meaning you won’t have as many ATMs or branches to visit when you need cash (actually, that might not be a bad thing when you’re trying to save.)

You can find out more about credit unions here. If its right for you, you’ll have the added benefit of knowing you’re covered by the government if the credit union goes under—which is not always the case with a bank. [USA Today]