Avoid fixed-return securities

My husband is 67; I am 62. We have a $30,000 six-month certificate of deposit maturing soon. Should we invest in one of the money-market funds? Or is it wise to have most of our savings tied up in savings certificates? H. D.

The six-month CDs you mention are safe and have been paying good returns -- about 11 1/2 percent much of the time recently. But they lock up your funds for six months unless you pay a penalty. Money-market funds, including the fund you mention, are not insured and pay a bit more income. They also may be liquidated quickly without penalty.

As for trying your funds up in CDs, I recommend keeping only a small part of your resources in these certificates for money you might need in an emergency. To avoid the penalty, you can borrow against the CDs as collateral for 1 to 2 percent interest differential. Now is a good time to lock up available high-interest returns for a longer period. You might consider deep discount bonds or low-priced utility stocks paying substantial dividends. Both are paying close to or more than the current yield on CDs and offer the potential for appreciation over the next 1 1/2 to 2 years.

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