Interest rates are finally done punishing savers. With the Federal Reserve’s actions over the past couple of years, rates on many popular short-term investments are now north of 5%.

Leaving your hard-earned cash in a checking account might seem safe, but inflation is silently gnawing away its value. If you feel like you could be earning more, consider these 2 alternatives:

Locked and Loaded: CDs (Certificates of Deposit)

Banks issue CDs as a way to borrow money for fixed periods. They can be bought directly from banks, or competitive rates can also be bought through a brokerage account (like the ones we offer through Fidelity). There are a few benefits to CD’s

• Earn Interest: Lock in a fixed interest rate above typical checking accounts

• Variety of Terms: Choose terms ranging from months to years to match your savings goals.

• FDIC Insured: Up to $250,000 per depositor, offering government protection for peace of mind.

However, there are a couple of drawbacks:

If you need the money before the term is up, you’ll surrender part of if not all the interest you’ve earned. Additionally, that income is fully taxed at the state and federal level. For top California investors, that means you could be paying over half of your income back in taxes.

Keep More of What You Earn with Treasuries (and Treasury Money Markets)

Treasury Bonds are offered by the government and can be bought on treasury.gov or through a brokerage

• Backed by the U.S. Government: Considered one of the safest investments available. FDIC limits don’t apply as they’re backed by the full faith and taxing power of the US Government.

• Stable Returns: Predictable interest payments provide reliable income.

• Variety of Maturities: Options from a few days to 30 years.

But wait, there’s more:

Selling Treasuries before maturity doesn’t mean forfeiting interest: Investors get paid for their “Accrued interest” by the buyer.

Best of off, Treasury Bond interest is exempt from California income tax, making them some of the most attractive stable-principal fixed-income investments around.