By Brian O’Connell
Rates on Certificates of Deposit (CDs) may have fallen over recent months, but CDs are still one of the best hedges against the kind of stock market volatility we saw in 2008, when millions of stock investors saw their portfolios slashed by 40% or more.

But what’s the best way to buy a bank CD? While experts offer up countless advice on the topic, there are a few things most banking gurus seem to agree on.

For starters, investors mulling over bank CDs should go in to the process with their eyes wide open. That means recognizing your investment time horizon and knowing where to look for great deals. BankingMyWay, for example, has a CD rate finder that includes fresh information on CD rates from thousands of banks and credit unions across the U.S.

Here are some other key tips:

Make sure you learn about early withdrawal penalties. Reality can intrude on a CD investment, and sometimes investors may need to withdraw money before it matures, usually to handle a big emergency like the loss of a job or to pay unforeseen medical expenses. If that happens to you, find out how much you’ll have to pay first before you cash in your CD before maturity.

Get a geography lesson. Not every CD rate is the same, and some are only available in certain states or even cities or towns. CDs, like a lot of bank products, are regulated by a spider web of state and local statutes. Consequently, a bank may be restricted to hiking CD yields to certain geographical areas. Before you invest, make sure the bank CD rate you see is the bank CD rate you get.

Make yield a priority over interest rates. Yield is usually a better barometer of a CDs performance than its interest rate. That’s because yield incorporates a compound return rate. The more frequently a bank CD compounds, the stronger the yield.

A bonus tip: if you see a great CD deal, don’t sit on the fence. Banks can and do cut CD rates on a regular basis. So, if you don’t act quickly enough, today’s steal may become tomorrow’s bad deal.

Also, if you have a problem or a complaint about your bank CD, the U.S. Securities and Exchange Commission may be able to help. Send your letter to www.sec.gov/complaint.shtml.

— For more ways to save, spend, invest and borrow, visit MainStreet.com.