What to do with $10,000

Low interest rates and the recent stock market surge make this a challenging time to find the best places for your extra cash.

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Keep more from the tax man's grip
Are you a high earner worried about tax hikes? Anyone in the 28% federal bracket or above can benefit from putting $10,000 into a municipal bond fund such as Fidelity Intermediate Municipal Income (FLTMX). Its 3.6% yield becomes an effective 5% for someone in that bracket -- beating the 4.5% paid by Fidelity's regular intermediate-term bond fund.

If you live in a high-tax state, you may do better with a muni fund that holds only bonds from your state; you'll owe no federal or state tax. (To figure your effective yield, use the calculator at investinginbonds.com; click Learn, then Municipal Bonds.)
NEXT: Protect your portfolio against inflation
Last updated November 18 2009: 5:47 PM ET
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