Net Gains: Where to Put Your Savings

"There are risks anytime investors stretch for yield," says David Kaiser, president of Pinnacor Financial Group in Denver. "We are advising clients to just be patient. This too will pass and the markets will return to a more normal risk-reward scenario within one to two years."

Along with ultra short bond funds, savers who want to be sure their principal is safe may also want to steer clear of short-term corporate notes marketed by some large companies to small investors as a place to park cash. For instance, General Electric touts its GE Interest Plus program with "Higher rates of interest than other cash alternatives like FDIC-insured savings accounts, short-term CDs and money market mutual funds."

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But short-term notes like these amount to an unsecured loan the investor has made to the company. If the company encounters financial difficulty, the investor will stand behind the holders of secured debt when it comes time to get repaid.

As GE discloses on the GE Interest Plus Web site, corporate notes are not FDIC insured, and "unlike short-term bond funds or money market mutual funds, they are not diversified pools of investments."

GMAC and Ford Motor Credit Co., among others, offer similar short-term notes that carry all the risk of a single company's performance.

Chamberlain, the Santa Cruz, Calif., financial planner, said for clients stashing small amounts of cash or those who need liquidity, he recommends they shop for a competitively priced CD with a term that matches their needs. "It is to the client's advantage to call a number of banks and compare rates and terms," he said.

The best rates are often available to those willing to do their banking online rather than in person. Earlier this week, IndyMac Bank of Pasadena, Calif., was advertising a one-year CD with an interest rate of 4.10, but that rate was available only to accounts opened online.

According to Bankrate.com, the average rate nationally for a one-year CD stood at 2.91 percent Monday. For a five-year CD, the national average was 3.26 percent.