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First the good news: Americans are saving more, about 6.2% of their income compared to 2% just two years ago, according to the U.S. Commerce Department.

Of course, some economists will find a black cloud in the clearest sky and worry that people aren’t spending enough to lift the economy out of the doldrums. But we can’t satisfy everyone and from an individual’s point of view, saving is surely more beneficial than spending. Besides, there’s a good chance a lot of today’s extra savings will be spent fairly soon, as people become more confident of staying employed and don’t feel they need so much in reserve.

So if you’re building up this kind of temporary rainy-day fund, where’s the best place to put it? It needs to be accessible, but interest-bearing checking accounts, savings accounts and money market accounts can pay next to nothing. If you’re building a sizeable fund, it’s nice to earn a little bit of interest.

Traditionally, one option is a laddered portfolio of certificates of deposit. A few short-term CDs allow you to get at your money quickly, while long-term CDs tend to earn higher yields.

Another option that might be more suitable in today’s low-rate conditions: Putting the lion’s share of the savings into five-year CDs. According to the survey (, five-year CDs average just under 2%, compared to 0.29% for three-month CDs.

But what if you need your money within the next five years? You can always withdraw it early but will suffer a penalty, typically a loss of the last six months’ interest earnings. If you cashed out after a year, you’d still earn 1%--triple the annual earnings on a sequence of three-month CDs.

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You’d know your money was completely safe since bank CDs carry FDIC insurance. And in today’s financial environment, it’s more important to protect cash investments against loss than to take risks reaching for yields that are only slightly higher.

Consider some of the standard alternatives: Five-year U.S. Treasury notes pay only about 1.5, and you could lose some of your principal if you sell early and interest rates go up, since few investors would want your stingy bond. The 10-year Treasury is a little more generous, paying about 2.85%. But its value would be hit harder if the interest were higher when you wanted to sell.

CDs look like a good place to stash cash you may want to access on very short notice. Try the BankingMyWay shopping tool to uncover above-average deals.

Discover Bank (Stock Quote: DFS), for example, has a five-year CD paying 3% -- more than you can get on a 10-year Treasury note. Many credit unions have five-year CDs approaching 3.5%.

It’s critical to read all the fine print so you’ll know what it costs if you want your money early. Getting cash out of a CD is never as simple as withdrawing from a checking account, so be sure to keep a healthy cash reserve in checking before piling the cash into CDs.

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