How to shop for the best deals while CD rates are low

— -- There are plenty of legitimate reasons to lose sleep these days. Falling real estate values. Rising unemployment. The heavy metal garage band next door. But here's one issue that shouldn't keep you up at night: limits on your federal deposit insurance.

A housing bill signed into law last month extends the $250,000 limit on federal deposit insurance through 2013. Credit union accounts that are insured by the National Credit Union Administration are also insured for up to $250,000 through 2013. The $250,000 threshold, enacted last October to strengthen confidence in the financial markets, was scheduled to drop back to $100,000 at the end of this year.

The extension is particularly reassuring for investors who have more than $100,000 in certificates of deposit that mature after Dec. 31. Those savers will "continue to have coverage, probably for the full maturity of the CD," says Kathleen Nagle, associate director for consumer protection at the Federal Deposit Insurance Corp.

Many savers will be able to insure much more than $250,000, Nagle says. Joint accounts are covered for up to $500,000, as long as both account holders have equal withdrawal rights. That's in addition to coverage for individual accounts, she says. A couple could each invest $250,000 in an individual account, and invest an additional $500,000 in the joint account, for a total of $1 million.

Unfortunately, our fictional couple won't have much to show for their investments. The average rate for a one-year CD was 1.2% last week, according to Bankrate.com. The average rate for a five-year CD was 2.2%.

You can boost your returns a little by buying CDs of different maturities, a strategy known as laddering. For example, if you had $30,000 to invest, you would divide it equally among a six-month, 2½–year and five-year CD. If rates rise, you can roll over your short-term CD at higher rates, and if they fall, you've locked in the higher rates with your longer-term CDs.

But with long-term rates so abysmally low, consider laddering CDs that mature in a year or less, says Greg McBride, senior financial analyst for Bankrate.com. Keeping maturities short, he says, will give you plenty of flexibility to take advantage of any increase in longer-term rates.