Short-term CD yields worth looking at
By Laura Bruce • Bankrate.com

You might think CD yields would be less than enticing considering the surplus of awful news in the financial sector. Yes, there's a big push by consumers into government-backed investments that will return 100 percent on the dollar if a bank topples, but there are also banks that need deposits, and plenty of them.

In fact, many institutions are offering good yields on short maturities of one year or less. That gives you a way to earn a decent return while waiting for the turmoil in the financial markets to ease.

"For us, the most popular term has been the 12-month," says Larry Fuschino, director of savings deposits at Wachovia. "We've been successful in the longer terms but, I think in general, most customers are trying to hedge their bets and ideally would love to have something fairly short-term. They recognize that there are so many uncertainties that they want to lock in the best compromise rate they can find."

Wachovia* is offering a 12-month CD with an APY of 4.3 percent; and a seven-month CD with a yield of 4 percent.

Washington Mutual is paying 4.25 percent on an eight-month CD and 5 percent on a 12-month CD that must be opened online.

The average yield for a typical one-year CD is 2.47 percent, as tracked by Bankrate nationwide surveys. Even a five-year CD, yielding an average 3.55 percent, can't match these specials.

"I think some of this is demand-driven and some is driven by public relations," says Jason Flurry, Certified Financial Planner and president of Legacy Partners Financial Group in Woodstock, Ga. "They're trying to say, 'You've heard all this bad news about us but we can pay this, so maybe things aren't as bad as you thought.'"

Even customers who want a high yield for a very short amount of time can find deals. Crestmark Bank in Troy, Mich., doesn't offer savings or checking accounts, just CDs that anyone can buy online. They're offering a 30-day CD that pays 3.65 percent, with a minimum deposit of $25,000.

Senior vice president Gus Mattia says not a lot of individuals go that short, but the bank's 90-day CD at 3.9 percent, also with a $25,000 minimum deposit, is very popular.