If you are like many of the people who have graduated or left college, the name Sallie Mae sends chills up your spine. Sallie Mae is one of the leading companies that offers loan to students going to college so they can pay their tuition and other expenses. For years after leaving college, the Sallie Mae bill haunts the mailboxes and budget lists of thousands of people.

But the student loan giant is now offering something that is less scary – certificates of deposit. In addition to student loans, Sallie Mae CDs is a step in the direction of offering various financial products for consumers. Currently, Sallie Mae is offering three types of CDs – a 12-month CD, 36-month CD and a 60-month CD. With the longer term CDs come higher interest rates, which is fairly typical of most CD accounts. As of July 2010, Sallie Mae is offering a 1.55 interest rate for 12-month CDs and a 3 percent interest rate on 60-month CDs. Those are very respectable rates when compared to other CD rates across the country.

Sallie Mae is also offering the opportunity to choose how often you take the interest payments from your CD. You can either take your payments each month, every quarter, every year or you can simply wait unto the CD matures before collecting any of the interest. This is going to be one thing that separates a Sallie Mae CD account from the other banks and their CD accounts.

If a Sallie Mae CD account sounds like something you would be interested in, you can simply go to the company’s website and sign up for one in just a few minutes. There is a four-step process to purchase a Sallie Mae CD and there is no minimum deposit or monthly fees if you sign up with Sallie Mae. Another great thing is that Sallie Mae does not charge a penalty for withdrawing your money early. You only have to pay a fee on the amount of money you take out of the CD early. Also, when your CD gets close to maturity, you will have the option of automatically renewing it or you can roll it into another CD without doing anything. The money is insured by the FDIC so you can invest in Sallie Mae CDs with confidence.

When looking for the best CD rates before investing your money, some people try to “time the market,” meaning that they try to determine if the rates are going to increase or decrease before they tie their money up in a CD account. But timing the market is hardly ever a good idea and it rarely results in higher returns on your investment.

One investor recently asked a question about timing the market to get the most for her money. Her and her husband put some money in a money market fund which was only earning one percent interest for them. They had other money for emergencies but they wanted to reinvest their money market money into an account that would give them more.

She was considering putting their money into a 3-year CD account which would earn them 2.7 percent interest. Advisors had told her to split her money up into several CD accounts so all of their money was not tied up in one account in case they need it later. She had the idea of purchasing several CDs at the current rates and then pulling the money out, paying the withdrawal penalty and then putting that money in CD accounts if CD rates go up in the next few months. Her question was this: Would it be a smart financial move to do this?

What she was talking about was CD laddering. When you have you money invested in a CD laddering strategy, it is important to leave the money where it is. The CD laddering strategy is for those who can let their money sit until each CD matures and then reinvest that money into longer term CD accounts upon maturity. So basically, the quick answer to her question is this: Put together a CD laddering strategy in which she could invest some of the money into a 6-month CD, a 1-year CD and so on. Then, as CD rates increase over time (if they do), she can reinvest the money from the maturing CDs into the CD accounts with higher rates.

CD laddering helps keep investors from being locked into a low rate for too long. As a result, if CD rates increase, the investor has the opportunity to reinvest the money at the higher rates as long as those rates stay that high as their CDs mature. It’s a great strategy for those who have the money to invest in several CDs at the same time.

Certificates of deposit are great ways to invest your money to have it working for you. However, it only works if you don’t need to touch that money for the life of the CD. CD rates are at decent levels right now, but getting higher yields is always the goal of many investors.

For those who are looking for larger yields without risking too much, a callable CD may be the ideal approach. Callable CDs have better returns than traditional CD accounts and they are even insured by the FDIC. But while callable CDs seem like a great deal, there is some fine print that you should know before putting all of your money into one.

One of the main differences between a callable CD and a traditional CD is that the issuer of a callable CD can “call” your CD from you before it fully matures. This means that the bank can end your CD after a certain amount of time and return your money with interest. For instance, if you have a callable CD with a call date of one year, the issuing bank will evaluate your CD account each year and determine if it wants to keep your money in the account or close out the account.

The call date on a callable CD is much different than the maturity date. Maturity date refers to the actual length of the CD. You can have a maturity rate of one year, five years, 10 years and even longer. The call date will always be shorter than the maturity date.

But why would a bank want to “call” your CD and return your money with interest? Since interest rates change from time to time, the bank will always want to make sure it is getting the best deal. If the interest rates decline significantly, the bank can borrow money at lower rates than what your callable CD is earning. As a result, the bank will see that it is in their best interest to stop paying the current interest rate on your CD and close it out. You would then have to find another way to invest the money.

While callable CDs offer higher yields, they tend to have a great deal of uncertainty attached to them. There is nothing wrong with investing in a callable CD if you are comfortable with it getting closed out before maturity. But knowing the difference between these two types of CD will help you make an informed decision about the best investment opportunities for your situation.