What to do with that money grandma gave you

Most college students don’t have any extra cash to invest, but if you do have savings you might want to consider putting some of that money into a Certificate of Deposit which is more commonly called a CD.While a regular savings account has an interest rate of about 0.25 percent, a CD can have an interest rate of 4.46 percent for a four month commitment said Jennifer Bugge, Assistant Financial Center Manager at Washington Mutual’s Wallingford Center.“The interest rates are unsteady and that is reflected in the low rates for savings accounts,” Bugge said. “We don’t know what is going to happen in the long-term, especially with 2008 being an election year, so the interest rates for long-term CDs are going to be lower.”This means that the highest interest rate is for a four month commitment and is cut in half for a five month or more commitment. So if the interest rate is 4 percent for four months it will be about 2 percent for five months.You can open a CD up with about $1000, though the minimum deposit will vary from institution to institution. You will be penalized if you withdraw before the date it becomes available, so keep your emergency money in a separate account. A CD is a good way to make money off of funds that would normally be sitting stagnant.Check with your bank for the most current rates – they change every week.