Short-term CDs just aren’t attractive at the moment. The 10-year Treasury is now pushing 4% - changing the entire yield curve. While the Fed may try desperately to hold rates low, but the reality is that inflation is a real threat at the moment. If we do see inflation, savings and money market rates will quickly go up. Since savings rates are very close to, and in many cases – above, short term CD rates, they are your better bet. There is a real risk of higher rates, and if they were to fall, they don’t have far to fall anyway.

See the best CD rates here.

A quick glance at the CD rates offered by the big banks - Chase, Wells Fargo, and Bank of America, shows that the banks are somewhat competitive in some terms.

For example, Bank of America is offering a 3.01% APY 48-month CD. That would put it sixth on the BestCasCow 48-month CD rate table. Wells Fargo is offering a 1.95% APY 12-month CD that would also be a contender on the rate table, albeit lower down.

This is based on the rates listed on their websites for the Commonwealth of Massachussets. Rates do vary by state. Depistors who have premium relationships with the big banks can often get even better rates.

Some rates though make one wonder why they even bother to list them. Bank of America offers a 90 day CD with a .50% APY rate while Chase will take your money for 12-months for .25%. Both are horrible investments.

There are better alternatives. Instead of a 90 day CD, why not money into an EverBank account paying 3.01% APY guaranteed over 90 days? The money is totally liquid in this money market account. Of, to simply invest in any of the top savings accounts on the rate table. It's a pretty good bet all will be paying aboe .50% APY in 90 days.

There are also many banks that will pay well above 2% APY for a 12-month CD.

Bloomberg reports that Bank of America brought in $5 billion of deposits over the last month due to leads from Merrill Lynch brokers:

"Certificates of deposit sold by Merrill brokers jumped between May 5 and June 4 as Bank of America began providing thousands of leads each month, said Lyle LaMothe, head of U.S. wealth management, in an interview. That’s a sign the combined North Carolina-based company can push profit higher by selling more to each other’s clients, including mortgages and products tailored to affluent customers, LaMothe said."

Hopefully, these depositors did their homework to make sure they were getting the best rate possible so they are fattening their wallets and not the bank's.

There is a risk free rate. The absolute risk free rate is the Treasury rate, but for private individuals who put less than FDIC insured limits (currently $250,000) in a single account, the risk free rate is the rate on short-term CDs.

That's what you are going to get on your money, unless you want to take a risk.

Stanford Financial offered investors supposed risk-free returns with a rate well above the risk free rate so long as they put their money in CDs on some island in the Carribean. When the entire thing was exposed as a ponzi scheme earlier this year, investors were surprised.

The amazing thing is that there are still people who believe that they can outperform and dramatically outperform US CDs, but making dollar denominated investments in offshore CDs. I was amazed that over the last several days a group of people in Mexico are bombarding the web with the some CDs that are too good to be true (12% over 90 days, 15% over a year and 18% over 18 months, or something like that). Here is the link from one of these sites.

The internet, unfortunately, gives everybody in the world the ability to con people out of their money. Offshore CDs are nothing but ponzi schemes no matter how nice the offices, or the pictures on the website. I am bothered by how professional these sites look, and the likelihood that many will get sucked into this, in spite of how fresh the Stanford Financial experience should be. The allure of outsized returns is something that everybody wants.

The most bothersome thing about these offshore CDs is that Google is allowing them to proliferate and to advertise across their networks, in spite of how obvious it should be that they are ponzi schemes.