Certificates of deposit
Certificates of deposit (CDs) offer guaranteed returns and the interest rates are much higher compared to traditional savings accounts. The only problem is that CDs are not liquid. They tie up your money for a period of time and penalize you for making early withdrawals.
You can, however, sidestep this problem by using the laddering strategy — that is, by investing in several CDs with different maturity dates so that a portion of your investment remains accessible at regular intervals.
In addition, you can invest in no-penalty CDs which allow you to withdraw your money any time you want without paying any penalty. The downside is their interest rate is lower than that of regular CDs.
