Where to stash your cash

Money sticking out of bank book

Here's how to find a great place for the money you're saving for a few days to a few years.

Pick right and you'll earn a reasonable return with precious little risk -- your deposits will be insured by the federal government.

Pick wrong and you might as well be stuffing cash in a mattress.

Savings accounts are for money you know you'll need in the upcoming weeks or months. The balance should never exceed a few thousand dollars.

You want a savings account that has:

Beyond that, there are two keys to making a savings account work for you.

The first is to link your savings account to a checking account so that you can easily transfer funds between the two using an ATM or your computer.

Some banks will also allow savings accounts to provide overdraft protection for that checking account. Your savings is automatically tapped whenever there's not enough money to cover all of your checks and debit card purchases (for a fee, of course.)

The second key is to be paid an acceptable interest rate. You'll never get rich off the interest from a savings account, but too many banks offer absolutely pitiful rates -- 1% or less in the worst cases.

You'll find banks and credit unions offering 5% or more in our extensive database of savings account rates.

Don't be surprised -- or deterred -- if many of the best rates are offered by online banks.

Money Market Accounts are ideal for your rainy-day savings -- that three months of income everyone should have to get through a serious illness, layoff or other emergency. For most families, that means $10,000 to $30,000.

You want one that has:

An MMA may go untouched for a long time. But when you need it, you need it now. So you've got to be able to make withdrawals 24/7. That means linking your MMA to a checking account and having a debit card that allows you to directly withdraw emergency cash.

Earning a competitive return is also more important for MMAs than a savings account because it's a larger, longer-term investment.

Check our database of MMA rates for the best deals.

Certificates of Deposit are for longer-term savings -- money you're setting aside for retirement, cars, vacations or your kids' education.

With CDs, you commit your money for anywhere from three months to five years. Demand it back before the maturity date and you'll pay a penalty, usually three months worth of interest.

So the term you choose depends on two things:

Unlike with savings or money market accounts, banks and credit unions can't change the rate they pay on a CD. Once you've bought it, the rate is guaranteed until it matures.

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