There are multiple CD investment strategies - popular strategies like barbell, laddering and more, all of which work great in a normal interest rate environment, where 1 year CDs yield 3-4%, and 5 year CDs yield 6-7%. However, it has been a decade since returns on CDs have been at those levels. How can you generate a reasonable return while investing in secure instruments like Certificate of Deposits?

Clearly, if you are a US investor, then within the US, the best rates of return you can expect are around 1-1.25% for a 1 year CD, and 1.5% for a 2 year term. If however you are citizen of Australia/New Zealand, you can find terms that are in the 5% range for a 1 year fixed deposit, and in growth geographies like India, as much as 7%. As a global investor, you can find 'foreign currency' CDs - which however do not yield as much to the foreign investor as it does to the local citizen. For example, you can find yields of 2.5% for a 1 year Australian CD as a foreign investor - but not the juicy 5% that an Australian citizen can get. In the US, Everbank.com specializes in foreign currency CDs. Of course, you have to be aware of currency fluctuations if you open foreign currency CDs - fluctuations that can quickly wipe away any gains that you get in terms of higher yields.

Banks like Ally Bank in the US push the envelop on CD returns within the country by offering up to 1.82% for a 1 year CD, significantly outperforming other banks and credit unions. Furthermore, through a special program, Ally Bank gives you the incentive to allow your rates to adjust upward one time with a 2 year CD, or twice, with a 4 year CD. This is an innovative offering since in a persistently low interest rate environment expectations for a rate rise over the following 24 months are quite high. These types of CDs allow rates to be bumped up higher while locking in the capital for a 2 or 4 year period - to the benefit of the bank. Other banks like Bank of America are offering this feature through an 'Opt-Up' feature.

Of course, other investment forms such as short-term bonds, especially of a foreign (non-US) government are worth a closer look. And without saying anymore about it, avoid high-yield 'junk' bonds, whether those be from corporations or countries.

In a low-interest rate environment, renew CDs for the short-term, unless you are using a bump-up feature for long-term CDs. If investing in foreign-currency CDs, ensure you are assured of return of your principal (understanding who is insuring your money in case of an issue with the financial institution).

Broadly speaking, a low interest rate environment makes it tough for secure, passive income; which is one reason to try and develop additional means of income - either through a stake in a business, real-estate, dividend stocks, bond strategies and more.

Happy investing!