No. of Recommendations: 2
Elizabeth, Im' going to offer a reply to your queries that may differ somewhat from other responses you've gotten. It sounds like you already have an account at Schwab. If so, I propose that any marginal benefit you might get from switching to another service or opening an account elsewhere is not worth the hassle. I'd say the same thing about delving deeply into bond investing.
At Schwab (where I have accounts), the basic money market account is SWVXX. The yield you get on it varies, depending upon the prevailing interest-rate environment, but it is always competitive. You can move money into or out of it with one day's notice and with no penalty. You can read the prospectus on what it invests in; but it is quite safe. The comparable fund that invests exclusively in short-term Treasuries is SNVXX. I have money in each of them.
The advantage of CDs and/or Treasuries over those funds is that you can lock in a rate for a period of time--as short as 3 months to as long as 30 years. And you can build a "ladder" of these if you wish--say, expiring monthly or quarterly or whatever. Buying these through Schwab is very simple. You may want to look exclusively at recently/newly issued CDs or bonds, so that you don't have to pay the seller any accrued interest. And you'll probably want to avoid ones marked "callable," just to keep things simple.
There are also various bond ETFs one can buy, but if you plan to hold your CDs or Treasuries until they mature, any advantage of the ETFs is doubtful.
I'd keep things simple. And if you have questions, I find that the bond desk at Schwab is happy to answer them in simple terms.
