Best columns: Playing CDs, Parking cash

The credit crunch’s bright side

Lots of banks are struggling through the credit crunch, says Joan Goldwasser in Kiplinger’s, but “their pain is your gain.” The hurting banks, “desperate to attract deposits, are ratcheting up CD rates,” and many healthy banks feel compelled to match those rates. Today’s top rates are topping 5 percent, and “such plump yields put Treasury securities with comparable maturities to shame.” One-year T-notes are yielding 2.19 percent, for example. There are plenty of bad things about the credit crunch, but “there’s nothing wrong with a little schadenfreude” when you can get it these days.

Where to stash cash nowadays

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With supposedly rock-solid investments falling prey to subprime mortgage contagion, says Eric Dash in The New York Times, cash is no longer “the most boring of assets.” Investors usually keep “between 5 and 10 percent of their total assets in cash,” but many have upped that percentage to wait out the wildly swinging stock and bond markets. If you have cash to park, put no more than necessary in a checking account, and put the rest in money market accounts and CDs. CDs have higher rates, but are less liquid, of course; money market accounts are a good middle ground. Tax-free money funds are a solid choice this year, and money market deposit accounts often pay higher rates and carry FDIC insurance.