By Chuck Dunlap

MISSISSIPPI STATE -- Investment opportunities abound for the daring and not-so-daring investors as the booming economy has Americans searching for places to put their earnings.

Many Americans still prefer the traditional no-risk savings accounts as their only investment tools. Savings account interest rates have fallen to under 2 percent, the lowest rates available. Other risk-free alternatives such as money market deposit accounts and certificates of deposit offer as much as 5 percent interest rates.

Dr. Beverly Howell, Extension family economics and management specialist at Mississippi State University, said most people have not studied the options available so they rely on the familiar and convenient savings accounts.

"Banks do a good job of getting the information on alternatives to the public," Howell said. "It's just a matter of who is and who isn't willing to listen. Some people are used to doing things a certain way, and there is nothing wrong with that. But their money could be doing more for them than simply sitting in a low-interest savings account."

Most savings account customers site the "risk-free" characteristic of the account and like knowing that the accounts are insured by the Federal Deposit Insurance Corp. But money markets and certificates of deposit carry no risk and are guaranteed by the FDIC.

Money markets often limit monthly transactions and impose balance minimums, but earn about 3 percent interest. CDs lock up the money until the specified term ends. They offer a guaranteed rate of return, which often ranges from several months to several years. A five-year CD currently carries a 5 percent return rate. The longer the time period, the greater the return.

For the consumer willing to take some risks, money market mutual funds have become quite popular for those looking for even bigger returns. Though not as risky as playing the stock market, mutual funds invest in a wide range of tools, including stocks, corporate bonds and U.S. Treasuries. Returns are realized through income dividends, capital gain distributions or profits for selling shares. Mutual funds are not insured by the FDIC, but rather regulated by the Securities and Exchange Commission.

"Younger people are more interested in growth and the future, so they are more likely to choose the alternatives to the traditional savings accounts," Howell said. "Younger adults are also more likely to take some risks as well. Conventional savings accounts typically are used by and appeal mainly to older customers because they have used them throughout their lives.

"Any decision involving your savings should include an assessment of your age, risk tolerance and overall investment portfolio. As with any decision involving money, educating yourself is key."