 Dear Dr. Don,
I have a CD that matured recently and rather than purchasing another one, I have transferred the money ($500,000) into my checking account to wait it out until a decent 12-month interest rate comes along. I would much rather do that than get (slapped) in the face with the measly low rates that banks are offering.
I have looked into annuities, government bonds, the stock market and credit unions but they all seem to be playing the same game. Do you think I am doing the right thing, letting that large sum of money sit in my checking account and not earn a penny? The way I look at it is, if I'm not going to make a dime, no one else will either.
-- Alfredo Abject
 Dear Alfredo,
By holding half a million dollars in a checking account that pays you nothing, you're doing your bank a favor, but you're not doing yourself any favors. The bank gets to loan out your money, less any reserve requirement, at a net interest margin that gives them a nice profit.
Meanwhile, part of your money is not insured by the Federal Deposit Insurance Corp., and you're giving up yield on principal for a principle that I don't quite understand but sounds something like this: "I'll show them by keeping my money earning below-market returns until they improve the market return."
You haven't told me whether or not you're retired. You also haven't detailed your investment horizon, your financial goals for this money, your attitude toward investment risk or the rest of your financial picture. So I'd be hard-pressed to cobble together an investment strategy for these funds.
Instead, I'll suggest you work with a fee-based financial planner who will review your financial picture and make investment recommendations.
I can understand you not wanting to be "long and wrong" in investing, especially with CDs that have a penalty for early withdrawal. But you should be able to find a happy medium that doesn't have your money sitting, partially uninsured, in a noninterest-bearing checking account. At a minimum, you should consider using Bankrate's Compare Rates feature to find high-yielding money market accounts or savings accounts to put your money back to work.
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