Different Ways to Save Your Money

Here are some of the options you have when you want to invest your cash, but still keep it liquid.

Bond -- A debt security. When you buy a bond, you are lending money to the corporation, government or entity that issues the bond. In return for loaning the issuer money, you get a specified interest rate, which, depending on the type of bond, is paid either at specific periods during the life of the bond or when the bond matures. The principal is repaid at maturity.

Certificate of deposit (CD) -- A special type of deposit account that pays a higher rate of interest than a regular savings account. Typically, you invest a fixed amount of money for a specific amount of time and receive a fixed amount of interest in return. CDs are covered by federal deposit insurance (from the FDIC) up to $100,000.

Brokered -- CDs sold through brokerage firms. These CDs often have a higher interest rate than those issued by banks but the CD may be callable, which makes it a riskier investment. Although these CDs are sold through brokerages, they're issued by banks. It'simportant to identify the issuing bank because federal deposit insurance is limited to a total of $100,000 for each depositor in each bank or thrift.

Callable -- Some long-term, high-yield CDs have a callable feature, which means the bank that issues the CD has a right to terminate, or call, the CD after a set period of time -- usually one year. You, the investor, rates fall because the bank wants to reissue that CD at a lower interest rate.

Jumbo -- Generally, any CD that sells for $50,000 or more.

Laddering -- A method of investing in CDs that compensates for varying interest rates. Here's an explanation of how laddering works.

No penalty -- Some financial institutions offer CDs that allow you to cash-in the CD before it's maturity date, without penalty, as long as the CD is held for a required period of time -- sometimes just seven days. This allows customers to take advantage of newly-offered CDs that have higher interest rates.

Variable rate -- A flexible rate CD that often allows you to make additional deposits and sometimes a limited number of withdrawals during the term of the CD.

Checking account -- An account that allows the depositor to withdraw funds at any time by writing a check -- a document that instructs the bank to pay money from the writer's account.

Interest-bearing (NOW) -- Negotiable order of withdrawal. Essentially, an interest-bearing checking account.

Christmas Club -- Designed to let you set aside money for holidays or any special savings goal. There is a penalty for early withdrawals.

Money market fund -- A mutual fund that invests in high-quality short-term corporate and government debt securities. These funds earn a variable interest rate that's often comparable to the interest earned on CDs. You may withdraw money at any time without penalty. The FDIC does not insure your principal and earnings in a money market fund, but losing principal in a money market fund is almost unheard of.

Money market account -- A higher interest rate account than a standard savings account, usually requires a minimum balance, limits check writing and often charges a monthly service fee if the minimum balance isn't maintained. The FDIC insures these accounts.

Passbook savings account -- An interest-bearing savings account where the saver records transactions in a small book.

Share account -- The credit union's version of a savings account.

Share account certificates -- The credit union's version of a CD.

Share draft checking account -- The credit union's version of a checking account.

Statement savings account -- An interest-bearing account where monthly or quarterly statements, reflecting transactions, are sent to the saver.

Premium savings account -- May have tiered interest rates tied to higher balances.

Student/seniors accounts -- Special checking accounts for people under 18 years of age and, usually, over 60 or 65 years of age. These accounts often require low, or no, minimum balance.