Stock market turmoil is even prompting some pros to seek more conservative investments. Billionaire financier George Soros said last week that he is revamping his investment strategy to eliminate some risk. Soros isn't likely to be investing in bank CDs. But for many individuals, CDs offer a safe place to put some money, especially if it's earmarked for a particular purpose. And some banks are offering especially high rates to attract deposits so they can meet hot loan demand.
Banks say consumers are responding to the eye-catching rates.
CD rates look even better if you look at real return - the CD rate minus the rate of inflation. You have to pay income tax on CD interest the year it's earned. You can't get to your money early without paying a penalty in most cases. And despite recent stock market turbulence, stocks historically outperform all other investments over time. If you need the money to make a major purchase in six months to a year, they're a safe investment.