There comes a time in every investor’s trading life when for whatever reason you need to pull you money out of one investment or another and put your cash on the sidelines. It might be when you’re shifting your portfolio around due to risk control or you could simply be waiting while you figure out your next move. When the stock market begins hitting new highs every few days like it has recently, investors tend to get a bit skittish while they wait for the fall. If you’re in the same position and you’ve recently taken some profits and stepped aside for the time being, you might be wondering what to do with your new found cash.

If you’ve found that now is a good time to pull some risk out of your portfolio you might simply want to sideline your cash for the time being. The question, of course, is where do you put it? Your broker probably has a few different interest bearing account into which you can easily shift some cash, and of course there’s always a CD. Online savings accounts such as Emigrant Direct and ING are also possible candidates.

The key things you want to think about is how long you want your money out and where you think interest rates are headed. If you only need to put your cash aside for a few weeks or a couple of months, a CD is probably out of the question since the better paying rates are for a longer terms and you could face penalties for early withdrawal. However, if you think interest rates are headed down and you don’t mind tying up your money for awhile, then a CD can be a great option.

The most important aspect of putting your money on the sidelines is to shop around for the best deal and stay informed regarding the details of each account. Interest rates will vary dramatically between banks and even between different vehicles in the same bank. Compare rates at a site like bankrate.com to see the most competitive rates available online.

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