My advice: Stick to a bank or savings or loan, which is one of the 8,500 insured by the FDIC. If you are averse to buying a CD on the Web, let your fingers do the walking and call the banks in your area to find out who has the best deal.
Do not be afraid to negotiate and ask a bank to match the rate you find at another institution.
Unfortunately, juiced returns on a CD are sometimes indicative of trouble brewing beneath the surface of the financial institution.
For example, just before the collapse of IndyMac, the bank offered CDs with much higher yields then their competitors.
Currently, the average yield on a one-year CD is around 3.6 percent. There is no one-size-fits-all rule on CD rates, but it is safe to assume if you find a one-year CD with a rate greater than 5 percent, you should walk away from it.
Mellody Hobson, president of Ariel Investments in Chicago, is "Good Morning America's" personal finance expert. Click here to visit her Web site, www.arielinvestments.com. Matthew Yale contributed to this report.