What to do if CDs are not safe?

FDIC upped their insurance fees from banks due to more bank failures. In 2009, there are already 25 banks failures that cost some $20B. FDIC estimated that this number is rising and counting. To encounter the tide, FDIC planned to have $80B. The current policy is that FDIC insures up to $250K with each account, including CD and savings.

Generally, CDs have larger amount of balance. When banks fail, this part of impact is the most significant one. Therefore, if CD is not safe, what to do? There are a few ways to have self-insurance, upon your flavor.

If you perfer CDs, you can split one CD into a few other accounts in some reliable names. For example, you can open accounts in Wells Fargo, JP Morgan, and Bank of America as wells as some regional smaller brands. These smaller banks are not as scary as some big banks, e.g., Citi Group, and they are making tons of money from their loans.

If you don't want to stick with CDs, you can try the Treasurys and Corporate Bonds. There is no need to mention the safety of the Treasurys. But be careful about Corp Bonds. They can be from 5% to 20% yield. The higher the yield, the higher the risk too (they are junk bonds, mostly). Thus, look up banks in your area to select the investement rating bonds that with at least A ratings. The minimum investment in bonds is $1000. You can look it up from your banks or open accounts on online brokerage firms such as Etrade.