Where the Best Savings Rates Are

Every week, we take one question that you post on our Facebook page and bring in the best and brightest to help you. This week’s question comes from Rashida:

I received a lump sum payment from an inheritance. I need to know how I can best save it.

Greg McBride, senior financial analyst for Bankrate.com, says it’s not about chasing return anymore, which is why conservative cash investments are the most appealing.

Here are the best savings rates from across the country for different investment vehicles, courtesy of McBride:

1. HIGH-YIELD SAVINGS ACCOUNT, APY 2.3%, Heartland Bank Direct (St. Louis, MO)

Pro: Must for everyone because it is FDIC insured and you will stay ahead of inflation and maintain the buying power of your money. Plus high yield has a higher return than a traditional savings account.

Con: None. Everyone needs savings.

2. MONEY MARKET ACCOUNT, APY 2.3%, Flagstar Bank (Troy, MI)

Pro: Depositing money in a money market is as easy as depositing cash into a savings or checking account. Cash is immediately available for alternative investments.

Con: Some financial institutions place a limit on the number of checks that can be drawn against the account in any given month. The rate of interest is directly proportional to the investor's level of deposited assets, not to maturity as is the case with certificates of deposit.

3. 6-MONTH CD, APY 2.25%, GMAC Bank (Midvale, UT)

Pro: You lock in a return so you know what you are going to receive. CDs offer savers a locked interest rate in exchange for agreeing to keep their deposit in the account for a fixed term, anywhere from a few months to several years.

Con: Try to make a move before the maturity date and you’ll get penalized.

4. 5-YEAR CD, APY 3.66%, Intervest National Bank (New York, NY)

Pro: Same as 6-month CD but you have a locked in rate for a longer period of time. Typically, the longer the term of the certificate of deposit, the higher the rate.

Con: CD rates are fixed for the term of the CD and you may be penalized for withdrawing funds before your certificate of deposit matures.