In this market, putting your cash under a mattress may appear more promising than an investment, but bond exchange traded funds (ETFs) and a few other places, are offering a safe place and a decent yield.

Katy Marquardt for US News & Workd Report has five ideas on where to stash your cash.

• Money market account: Bank products are offering a safe place to park your cash and offer the appeal of security. You can find  yields of 3.2% to 2.6% right now. FDIC insurance covers you up to $250,000.
• Certificates of deposit: CDs used to sound dull, but they are sounding quite rosy in these markets. With these investments, you trade liquidity—or easy access to the money—for a fixed interest rate over a set period and you get the FDIC insurance, risk-free.
• High-yield online savings account: Internet based banks have a low overhead so they offer competitive rates versus traditional branches. The best rate is 3.3% so far. And, yes, you get FDIC insurance as well.
• Bond ETFs: The transparency in an ETF is unbeatable and playing it safe with a Treasury right now is the way to go. Although there is not FDIC insurance, holdings are backed buy the federal government, so investors can sleep at night. iShares Lehman 1-3 Year Treasury (SHY) offers 3.3% now.
• Municipal bond funds: For upper-tax bracket citizens, the muni-bond is a good bet.  With munis, investors get the benefit of tax-free income, less volatility than corporate bonds, and more safety. Munis come in ETF form such as the iShares S&P National Muni Bond Fund(MUB) which yields a tax-equivalent of 5.7%.

Tags: MUB, SHY

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