Some people stagger small amount in CDs so at least one CD is set to mature each month (giving you access without penalty). I read in another thread that e-loan is offering a good interest rate on a 1 yr CD, but I've never used them. Regions bank was offering 3.25% on a 6 month CD when we opened ours. I don't mind doing long term CDs because you can always cash a CD out with minimal penalty. We had to cash ours out early and the penalty was only $5, we sill received interest for the few months we had it in. It might be a good idea to several CDs so if you need to cash out you still have some earning.
Zen doula-mama to my spirited DS1 (2/03), my CHD (TAPVR) warrior DS2 (6/07) & a gentle baby girl (8/09)