Invest for the best yields with the least risks

As of Jan. 29, 2020, a five-year Treasury bond is yielding 1.41 percent, so you earn $141 annually on your $10,000. A Vanguard Treasury bond fund (VGIT) brings a tad more, at 1.59 percent.

You may get slightly more on a tax-adjusted basis, because states don't tax U.S. Treasury interest. Nevertheless, your tax bump will be fairly small. Five-year Treasury note yields are

actually higher than the average five-year CD (1.13 percent), but you don't have to settle for average. Investopedia, along with DepositAccounts and Bankrate, is a good site on which to

find great CD rates. Rates for five-year CDs are as high as 2.70 percent, though you may have to pay $5 to qualify to join a credit union and open a $50 savings account. Each $10,000 nets

you as much as $270 a year in interest. I happen to like finding CDs that pay higher rates as well as offer a small early-withdrawal penalty. That's because if rates rise, you can pay

that small penalty and reinvest it in that same institution or anywhere else that will offer a higher rate. For example, Ally Bank's five-year CD yields 2.15 percent and has only a

five-month penalty. If rates rose by a percentage point, you could pay the penalty of 0.90 percent so you could earn 1 percent more per year for the next four years. This is superior to bond

and bond funds, as bonds lose value if interest rates rise. By my estimation, an intermediate-term bond or bond fund would lose about 3 percent of its value (including the interest payment)

with that 1 percentage point increase in rates in one year. With that Ally CD, you'd earn about 1.25 percent after paying the penalty (2.15 percent less the 0.90 percent penalty).

_"My advice is not to get greedy and shoot for income that has you losing your money or being lazy and safely earning virtually nothing on your cash."_ — Allan Roth FOR WAYS TO

SAVE AND MORE, GET AARP’S MONTHLY MONEY NEWSLETTER. Always read the fine print before opening CDs, and make sure you stay below the federal insurance limits of $250,000 per depositor. Most

people who title the CDs right can get well over $1 million of insurance at each institution. For example, a joint account is insured to $500,000, and each spouse can have an individual

account with $250,000 of insurance. Titling with your children payable upon death (POD) can get you even more insurance. A common mistake I see is people thinking that the FDIC/NCUA

insurance is per account — that is not the case. If a single person had two $200,000 accounts just in her own name at the same institution, she has only $250,000 of insurance and has

$150,000 uninsured. The FDIC has an insurance calculator you can use if you are in the fortunate position of having this much cash. Understand that if you have tens or hundreds of thousands

of dollars in cash, these ideas can add up quickly and, over time, make a huge difference in your retirement.