Anyone who’s been banking for the last few decades can remember the days when CD rates were so high that their interest alone could fund a lush retirement. The peak came in August 1981, when the interest rate for one six-month CD in particular hit 17.98 percent, according to

To put that in perspective, if someone had deposited $10,000 into a CD that month, and that person could keep rolling over the deposit into a new CD for 40 years, their account would be worth over $13 million at retirement (assuming interest rates compounded daily).

We don’t have to tell you that times have changed. These days, the United States Federal Reserve has been keeping the federal funds rate – its short-term interest rate – below 1 percent (closer to zero, really). And since banks rely on the prime rate (along with other market and business conditions) to set their own interest rates, the returns on their savings accounts have been pretty low as well, Bankrate explains.

Despite the low prime rate, CDs are still a good place to park your money. For one thing, unlike stocks and many other investments, bank CDs are safe – FDIC insured up to the maximum allowed by law. Plus they’re much more flexible than they used to be.

For instance, before, all CDs required you to leave your money in until maturity or face a penalty for early withdrawal. Now savers have options such as Ally Bank’s No Penalty CD, which allows you to close your account six days after funding with no penalty.

Plus, Ally Bank continues to offer highly competitive rates on its CDs, paying a 0.89 percent annual percentage yield (as of March 27, 2013) for its 12-month High Yield CD. (Use Ally Bank’s CD Widget below to compare rates.)

If CDs are starting to sound appealing to you, here are three suggestions you can use to make them work even harder.

Using CD Ladders for Dollar-Cost Averaging

CD laddering is a type of dollar-cost averaging. CD laddering lets you open a short-term CD that gives you faster access to your money at lower interest rates and also lets you open a long-term CD that pays a higher interest rate, which holds onto your money for years.

With CD laddering, you can spread your money out among several different CDs with varying interest rates and terms. Use this strategy and you’ll have access to some money when your short-term CDs expire, while getting a higher payout from your long term CDs. Meanwhile, you’ll constantly be renewing CDs, always giving yourself the option to take advantage of the highest paying CD interest rates available. You can get started by using Ally Bank’s ladder tool.

Taking Advantage of Rising Interest Rates

At one time, one of the few drawbacks of a CD was that you were locked into whatever interest rate was available when you opened the account. But now, with products such as Ally Bank’s Raise Your Rate CD, you can take advantage of rising CD interest rates, while also getting the advantages of a traditional CD.

For instance, with the Ally Raise Your Rate CD, you can enjoy a great rate now, plus have the option of increasing your rate once with our 2 year CD or twice with our 4 year CD, if the rate goes up for your CD’s term.

Buying CDs in Parallel

Like CD laddering, buying CDs in parallel lets you spread out a cash deposit over several CDs, but the difference is that all of the CDs will have the same maturity date.

For anyone who worries about tying up money in a CD – and having to pay a penalty for an early withdrawal – buying CDs in parallel gives you a way to access your account in an emergency with minimal drawbacks. Instead of putting $10,000 into one CD, allot the cash among, say, five of them. If you find you need access to $2,000 of your money before the CDs mature, you’ll only have to pay an early withdrawal penalty on the $2,000 rather than on the whole $10,000.

How long have you been putting your money in CDs? What kind of CD investing strategies have you used?