Rating CDs. (Ask B.E.).

QA How does a certificate of deposit work and where can I find the best CD rates?

--Via e-mail

Certificates of Deposit (CDs) are savings instruments that pay investors a slightly higher interest rate than a regular savings account. You can buy them at any bank or through other financial institutions.

While they are not the most glamorous investments, CDs may have a place in a balanced portfolio. They are safe investments because, like savings accounts, they are FDIC insured up to $100,000. There are many different types of CDs, and most require a deposit of as little as $1,000.

When you purchase a CD, you agree not to access the money for a specific amount of time: three months, six months, one year, or five years. If you want to withdraw the money before the agreed time period, you will have to pay a penalty.

Typically, the longer you agree to keep your money deposited, the higher the interest rate you will receive. Depositing larger sums of money will also increase your rate of interest. Interest rates for CDs are fixed; they don't change until the investment period expires. Once that happens, you can rollover your investment at the new market rate or withdraw your money with no penalty.

To find the best rates for CDs, go to www .bankrate.com. The site has loads of information about CDs and allows you to search for the best rates in your area or to search banks across the country. You can also log on to www .amazingrates.com, where you can search more than 20,000 financial institutions across the country for the best rates.

Mail your money management questions to Ask B.E., BLACK ENTERPRISE, 130 Fifth Ave., New York, NY 10011, or send an e-mail to [e-mail].

--M.S.S