Five Places to Put Your Cash to Work

Holding cash is a lousy option these days.

The Federal Reserve's rate cuts have driven down rates on CDs, money-market funds, interest-bearing checking and savings accounts -- places where people traditionally keep a cushion of cash for emergencies -- and left fixed rates on loans intact.

So why keep a cash cushion at all?

The purpose of a cash reserve is to be able to pay for unexpected emergencies. "You don't want to take too much risk with that," says James. J. Holtzman, an adviser with Pittsburgh-based Legend Financial Advisors. But, he adds, "rates right now are really miserable." ...