The well-known personal finance columnist Scott Burns had some interesting answers to a reader asking about CD alternatives in this Seattle Times article
. His first suggestion was to just search for better CD rates (unfortunately, he left out one website). His second suggestion was more interesting:
The second option is to do similar shopping for CD-like annuity products. While these don't carry FDIC insurance, they have the guarantee of the issuing company and state insurance programs usually cover them.
His third suggestion was on dividend stocks:
Those who can invest with a long horizon, however, should consider accepting some risk with some of their CD money, and using dividend stocks to augment their income.
The easiest, relatively low-risk way to do this is to buy shares of an exchange-traded fund that specializes in quality dividend stocks.