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One of the ways to add a little stability and safety to your investment portfolio is to create a CD ladder that can help you keep your money in an investment that offers safety and relative liquidity. However, that safety and liquidity come with a couple of downsides.The guaranteed returns mean that banks want to ensure that you will keep your money with them, and returns are generally fairly low.

There are two main problems that many have with investing in CDs:

1. “Relative liquidity” doesn’t mean “total liquidity”: Most CDs have penalties for early withdrawal.
2. Low rate of return: Because cash is safer, it has a lower rate of return, meaning that you won’t get very high yields.

There are ways you can get around these particular problems. But you might have to do a little shopping around.

Penalty free CDs

There are some banks (but not very many) that offer penalty free CDs. These CDs allow you to withdraw some or all of your money without paying a penalty. If you are concerned about the liquidity of your money, especially if you are planning on using a CD ladder as part of an emergency savings fund, a penalty free CD can be a good way to ensure access to your money.

However, you should only do this if liquidity is your main concern. This is because some banks offer lower yields on penalty free CDs than they do on those with penalties attached. Another concern is the fine print. Some penalty free CDs are only penalty free for a limited period of time, and there are other conditions that might need to be met. Be sure that you understand the real story behind “penalty free” at the bank you are working with.

Brokered CDs

Another way to get more from your CDs is to purchase through a broker. A broker can help you find the best rates and choose from a wider range of options. In many cases, you can actually find higher yields when you get a brokered CD. However, it is important to note that many brokered CDs do not have set rates, so it is possible that the yield fluctuates as interest rates do.

You can also get around the penalties charged on some CDs when you go with a brokerage CD. This is because there is a secondary market for CDs. In some cases, you can sell your CD and avoid the penalty. You might not get as much back for the CD as you would like, but it is often still more than you would get if you paid the penalty for an early withdrawal. Plus, if you are interested in buying CDs on the secondary market, as investments, your broker can help with that as well. Just remember that you will have to pay the broker.

Be careful with brokered CDs, though. While many of them are FDIC insured, not all of them are. Some brokerage CDs do not come with FDIC insurance, and it is up to you to double check to make sure that you protected. After all, one of the main reasons for investing in CDs is for their safety, and the guaranty that you will at least get your principal back. (Of course, you have to be aware that amounts of more than $250,000 — and $100,000 after December 31, 2013 — aren’t insured by the FDIC.)

Bottom line: CDs can be a great part of your investment portfolio. They provide a way to help you maximize your cash rate of return, while still offering a degree of liquidity and safety. You can get even more from your CDs if you shop around, looking for penalty free options, or by using a broker. Just make sure you understand the fine print.