NEW YORK (CNNMoney.com) -- If you've got a variable-rate loan - such as an adjustable rate mortgage - last week's interest rate increase by the Federal Reserve may mean higher monthly payments. But higher rates can also be a boost for your spare cash.

Financial planners say that now more than ever you should pay down any high interest debt because rising rates will eventually hurt.

Once you've done that, there are also plenty of legitimate reasons to hold cash - say for an emergency fund or for what you hope will turn into a downpayment on a house. Since you may need to tap those funds in the relative near-term, stocks are out of the question and a money market account or a certificate of deposit is the way to go.

"Cash investments are very attractive now especially as bonds fare poorly," said Greg McBride, Senior Financial Analyst, Bankrate.com. Bonds fall as interest rates rise.

Some of those accounts are offering interest of upwards of 5 percent.

Money market accounts invest in corporate debt, Treasury Bills and other short-term debt - all of which are sensitive to interest rate hikes, while also being secure.

"Money market accounts are good because they don't tie up money at all," said Ben Lipschitz, a certified financial planner at Elite Financial Solutions. "They're totally liquid."

Consumers can invest in money markets through bank accounts or mutual funds. At banks, you can never lose any of the principal. With mutual funds, you buy shares, which are almost always $1 a share. Their value could fall below that amount but that happens extremely rarely.

Money market mutual funds pay slightly better than banks but bank accounts are more secure.

But both are generally secure and treated almost as risk-free by financial planners. "The question between the two types of fund is: Do you have one lock or two locks on your door?" Lipschitz says.

In many cases, the accounts can be bought through the mail or online. Among the more generous deals, Metlife Bank offers a money market account yielding 4.25 percent while Capital One offers a money market yielding 4.75 percent.

Certificates of Deposit are another option. With a CD, you must choose the term of deposit, usually between one month and five years. Usually, the longer the term of deposit, the higher the interest rate.

AmTrust Direct of Cleveland offers a one year CD at 5.45 percent, for example. ING Direct offers a one year CD with the rate of 5.25 percent.

Before buying any cash investment, however, McBride urges investors to shop around. "There's a big difference in returns available between the bank around the corner versus a more aggressive bank that may be located in another state. Small banks trying to grow market share or fund loan growth can offer very attractive returns to needed deposits."

The low overhead of internet banks often makes them likely to offer more competitive rates.

McBride says the popularity of CDs and money market accounts are predictable. "Interest rates rise, returns on cash investment improve and investors take notice." And with rates so high, how can they not?

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