When I was working I didn't have a lot of cash reserves. I was in the 30% tax bracket and wanted my interest to be paid in the future so I wasn't taxed on it in the present. I bought some EE and I bonds even though they didn't pay the best interest, because it was deferred and I wouldn't have to pay state taxes. Ironically those are the cash investments that are paying the most in interest right now.

The month before I retired I cashed in a cd paying over 5%. February of 2009 I cashed in another paying 4.25%. Since then I have struggled to get 2%. I have much more of my investments in cash since my retirement as a cushion. Recently I have been looking for places to put my cash that will earn me some money. After reading several articles from this blog I decided to open a 5 year cd at Ally bank.

http://www.mymoneyblog.com/archives/2010/03/ally-bank-5-year...

http://www.mymoneyblog.com/archives/2010/03/ally-bank-cds-of...

I think interest rates are going to start rising so I was leary of locking up my money for a long period, however I think they will rise slowly and it will be 2 years or more before they are back up to 3%.

The 5 year cd is paying 2.99% interest which is almost double the 1 year rates I'm finding. But the reason I decided to go for this is Ally bank only has a 2 month penalty if you break the CD. If I open a $10,000 CD at 3% I make $300 a year. It breaks even with the 1.5% cd in 6 months. If I have to break the cd I only have to pay $50 in interest which is another 2 months. So at 8 months I break even with the 1.5% cd and if I don't break the cd I earn that interest rate for that many extra months.

Also I can get the interest on the CD monthly, quarterly or annually. I opted for quarterly. I plan to open a few of these so that I would only have to break a small cd if I did need to get money quickly. I don't expect to need any of this money for 5 years but you never know and if for some reason interest rates rise to 5% or more I could still take advantage when that happens.

I went to Walgreens this morning to use their grand opening $3/$10 coupon. One of my credit cards is paying 5% cash back on drugstore purchases this month. I am going to Ruby Tuesday's for lunch on Thursday so I picked up a $25 gift card for that. I also got a $15 gift card for Wendy's and a book of forever stamps. I especially like to buy stamps when I have 5% back opportunities since that's a hard category to save money on. I also got 25 pairs of ear plugs for $8.29 and 9 rolls of Quilted Northern for $4. I use ear plugs all the time to sleep and they are rarely on sale so the $3 off will work for those.

The Quilted Northern finished up a rebate for me. Buy $20 get $5 back, so I will be sending that in today.

I finished reading my book The Untamed Bride by Stephanie Laurens. Romance - excellent.