Investing in CDs is a safe investment when an FDIC (Federal Deposit Insurance Corporation) bank is chosen for your electronic banking. The fed raised the limits of FDIC insurance to $250,000 through the end of 2009. If a financial institution that you are banking with fails, the FDIC insurance will protect your money up to the limit of coverage.

Investing in the stock market can definitely be risky because of all the recent volatility in the financial markets in America. A certificate of deposit by comparison incurs zero risk. The best way to manage risk is to diversify your investments. If you “put all your eggs in one basket” then you run the risk of your single investment failing. A combination of CDs and online savings accounts will net you a safe investment but you may not yield the highest returns simply because they are considered no risk investment products.

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