Nervous investors may be tempted to take what cash they have and stash those funds in a mattress, figuring that this is one place that their money won’t be at risk. With the stock market fluctuating widely, confidence in investment banks dropping through the floor, and big questions remaining about just how bad the current crisis is, the temptation to stash your cash somewhere in your home looms large.

But, as we all know, cash on hand can easily be lost, stolen, or destroyed in a fire, a move that can have devastating consequences.

Instead, battered consumers are taking a fresh look at an old-time, but reliable investment option: safe certificates of deposit (CDs). Yes, these low-yielding, FDIC insured deposit accounts are back in favor again thanks to a shaky market and consumers who cannot stomach sharp losses.

A Certificate of Deposit Sampler

Rates for CDs are nowhere near what they were in the early 1980s, when returns of 15% or more were common. Then again, mortgage rates aren’t high these days either, therefore finding a decent return means anything above 4%.

For the record, CDs are FDIC-insured for up to $100,000 or $200,000 if jointly held. Most financial institutions pay a base rate for a minimum deposit (such as 1.50% for six months) while increasing their rates for larger deposits and longer terms.

ING Direct, an online banking institution is one company offering tiered interest on certificates of deposit. For six-month deposits of under $50,000 the rate is 1.75%, but jumps to 3.20% for deposits of $50,000 to $99,999. For deposits of $100,000 and above, the rate peaks at 3.4%.

The best rates are paid for long term deposits, particularly those of a year or longer. A twelve month CD at ING currently pays 4% while an eighteen month CD tops out at 4.5%.  Longer term rates are lower, which reflects both a promotional on ING’s part and possibly a hedge by the bank on midterm rates.

Other institutions offering higher rates include GMAC Bank (4.35%, $500 minimum, 12-month term); Nationwide Bank (4.05: $500 minimum, 12-month term); and Pacific Mercantile Bank (4.5%, $500 minimum, 12-month term). If you’re worried about a bank’s health, check out Bankrate.com’s Safe ‘n Sound bank rating system to find out who is at risk. As long as your money is in accounts covered within FDIC parameters, you’ll be okay, but going through a bank crisis is unnerving and can be a hassle.

Strategy Based On Your Age

The best financial planning strategy is often based on your age. People in or closer to retirement will often flock to the safest investment choices while younger savers are more willing to take a risk, knowing that they can still recover from a market turn down some 20,30, even 40 years later.

Check out a smart saving strategies by age segmentation chart to learn just how you should proceed, especially during these times when financial upheaval looms large. Get equipped to make right decisions and avoid panicking which can cost you dearly.

Tags: Add new tag, Bankrate.com, Certificates of Deposit, GMAC Bank, ING Direct, Nationwide Bank, Pacific Mercantile Bank, stock market

You’ve heard it before: what are the three most important things to consider when buying a home? Answer: location, location, location.

Every real estate agent repeats this question, drilling into prospective homeowners the reasons why location matters most — home values and your personal satisfaction will hinge on which home you have chosen.

Besides the home itself, there are some things you should do to decide whether your potential purchase is worth it:

Are the homes in your neighborhood being kept up? One house in disrepair is enough of a burden, but if that neighborhood has several homes in poor condition, then you could be witnessing the beginning of blight. Almost like cancer, deterioration tends to spread across neighborhoods where homeowners are not caring for their properties.

What sort of zoning restrictions are in place? You may be able to put up with neighborhood or association covenants, but what is allowed in adjoining areas? Having a home backing up to forested land can be ideal until you have learned that it has been zoned for business development. Do you really want your future neighbors to be a business?

Is your neighborhood a candidate for unwelcome change? New laws allowing towns to exert eminent domain over an area could change your community drastically. Check with the town to see if the planning board’s future plans for your new neighborhood could include rezoning or some other important changes.

Other factors can also make or break your new neighborhood:

Is it convenient to work, schools, and shopping? With gas prices surging, longer commutes are getting to be one big cost many homeowners must face. That bucolic tract of land in the country is fine, but if you must drive everywhere, is it worth your time and expense?

Who provides your local services? As you turned into your sub-division, you took note of the fire house nearby. Will they serve your home or will you have to call on the fire department across town? Water, sewer, and garbage removal are other services which aren’t always included with your taxes — what will your costs be to have the town provide services or will you be required to arrange your own garbage renewal?

The better the schools, the better for you. Even if you do not have school-aged children, having excellent schools serving your neighborhood is beneficial to your neighborhood’s stability. Excellent schools add value to the neighborhood as families seek them out. If your schools under perform, then your housing values will suffer accordingly.

Lastly, obtain a copy of the police report for your neighborhood. If crime is an issue, that report will reveal whether your community is safe or not. Of course, telltale signs such as bars on the window and alarm systems galore could be just the warning you need to look elsewhere.

Yes, location matters — do your homework to make sure that your neighborhood is, in fact, one you will be happy to live in.

Tags: Add new tag, home buy, home market, house sell, real estate, realtor