Make the most of your CDs

Yields sign with arrow and dollar sign

If your certificate of deposit is about to expire, you'll be getting a note from the bank telling you that unless they hear from you, they'll roll it over for a similar term at the going rate.

Don't let that happen.

Although rates are at a five-year high, making the most of your savings requires you to take advantage of two major trends.

Start with the limited-time specials many banks are offering to lure new customers through their doors.

Those specials are often for odd-terms -- seven or 11 or 13 months, rather than the traditional six or 12 months -- with the express purpose of attracting new deposits with flashy rates they don't want to pay existing customers.

Special rates may vary from city to city But in some areas, for example, Chase has a special seven-month CD with a 5.25% yield that's the annual rate of return including interest on the interest you earn. But it's only paying 4% for a six- or nine-month CD.

You need to make absolutely sure that you can't get a better rate sometimes a much better rate by depositing your money for a month more or a month less.

The second major trend is that the best rates are on short-term CDs.

Citibank, for example, is offering a 5.5% yield for six-month deposits, but only 4.45% on one-year CDs and 5% on two-year CDs (all with a minimum $2,500 deposit.)

If your bank won't pay 5% for a six-month CD or a comparable five- or seven-month CD -- shop around.

Our database includes a dozen banks across the country that are paying 5% or more on a six-month CD, with a minimum deposit of as little as $500. Just click here to find the best CD rates from local and national banks.

So if you have a maturing two- or three-year CD, you should seriously consider investing your money for a shorter period of time to take advantage of those rates and until we find out what's going to happen with interest rates.

Although rates will almost certainly remain where they are through the rest of the fall, it's impossible to predict with any confidence whether they'll be higher, lower or unchanged by next spring, much less this time next year.

That's why we think the best strategy is to take advantage of the best short-term rates you can find, understand the uncertainty we're facing and wait to see what happens

Certainly, if you have a lot of money in traditional savings accounts paying 2% or less, this is definitely the time to take advantage of a short-term 4% or 5% CD to make your savings work harder for you.

Handle your money like you are running a business. You are. Make the most of every investment. Earning a lot of money is better than earning a little money, but making a little money is better than not making any at all. Seize the opportunity and make the most of it.

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