Think local for better bank CD rates

With the market becoming a daunting place for some, those who can't stand the ups and downs of the market are heading to bank CDs for safety. More banks and brokerage firms have been pushing certificates of deposit in an effort to gain more customers and increase their cash reserves. More than ever banks are trying to entice customers by offering bank CD rates that have varying maturities, interest rates and perks.

Sometimes you won't find a good CD promotion with a well-known national bank, but you may find luck if you ask around at your local bank or credit union. You can also check the nationally available highest CD rates at Bankrate.com. Use Bankrate's calculator to figure out your earnings on various CD investments.

Don't forget that the interest earned on your CD will have to be reported to the IRS. When shopping CD yields, go for the higher rates but watch out for underlying fees. Always read the small print that comes with these offers. In addition, find out if the rates on these CDs are simple interest or compounded daily, quarterly or monthly. This makes a difference in the amount you earn.

When searching for CD products, it's a good idea to check out a bank's Safe & Sound Star Rating.

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