CD rates are all over the place.

Short term CD Rates are higher, longer term CD rates dropping.

3 Year CD Rates Over The Last 6 Months

1-5 year terms have dropped in most cases. The average one-year CD yield ticked up 1 basis point to 0.67 percent. The average five-year CD yield suffered though, falling 5 basis points to 1.88 percent.

The power of the internet lets us quickly find the best CD Rates. CD investments are one way to diversify and add stability to your portfolio. While CD rates are not as attractive as they were a few years ago, you can still get a decent rate if you shop around.

CD investments or certificates of deposits are a great way to tame a high-risk portfolio into a low-risk one. However, short-term CD yields are unlikely to improve significantly until the Fed raises rates.

That’s why it pays to shop around. As an example, Discover Bank is bucking the trend by offering competitive CD rates on CDs from three months to five years, paying higher than the national average. Here are the current Discover Bank CD Rates (as of October 7, 2010 – click on the link for today’s rate):

3 month CD – 0.7% APY

6 month CD – 1.00% APY

9 month CD – 1.10% APY

12 month CD – 1.35% APY

18 month CD – 1.50% APY

24 month CD – 1.75% APY

30 month CD – 1.85% APY

3 year CD – 2.0% APY

4 year CD – 2.25% APY

5 year CD – 2.75% APY

7 year CD – 2.90% APY

10 year CD – 3.00% APY

The minimum to open an account is $2,500. Interest from the advertised CD rates is accumulated daily and credited monthly. Discover Bank is FDIC insured and your deposits are covered up to $250,000.

Advantages of CDs with short maturities

CDs with short maturities of three months, six months or one year allow you to take advantage of rates that might increase right when you’re ready to reinvest your money. If your portfolio is full of CDs with long-term maturities and you don’t have more cash to invest, you won’t be able to take advantage of higher interest rates that might pop up in the market.

Benefits of CDs with long maturities

Longer term three-year, five-year and 10-year CDs offer higher interest rates for allowing the bank to hold and use your money longer. This gives you the benefit of gaining more from your investment. Ideally, your portfolio should include a combination of short-term and long-term CDs so you can use CD laddering strategies and get the most bang for your buck. Look for the highest CD rates at RateNerd.com.