Whether you're saving for a rainy day or a two-month tour of Europe, it's important to choose savings instruments that meet your needs. Fortunately, there are options out there that can help you stash your cash and earn a competitive yield.

At one point in time, it seemed that putting your money in a savings account was about as profitable as hiding it under the mattress. But an interesting thing has happened of late: An inverted yield curve has led to higher rates on safer investments, so that you can earn a decent return without having to take on too much risk.

First things first

When reassessing your savings program, spend some time considering your goals. Are you saving for your long-term livelihood or a shorter-term need? In the short- or medium-term, you might be saving for a home down payment, a new car, an extended vacation, or college tuition. When you have specific goals with precise endpoints, you'll need to structure your investments carefully.

High-yield options

One of the best options around today is the certificate of deposit or CD. If you aren't familiar with how CDs work, here's the overview: You agree to keep your money in deposit with the CD issuer for a certain period of time, and the CD issuer agrees to pay you a premium interest rate. Certificates of deposit are popular right now because the short-term rates are competitive with long-term rates, so that you don't have to tie your money up for several years to earn high yields. With a little research, you can find several six-month CD programs paying around 5 percent. Compare this to what you earn in a standard savings account and you'll feel like you hit the jackpot.

If you withdraw your money from the certificate of deposit early, you'll be assessed a penalty. This is actually a good thing-as long as you time the CD maturity to match your savings goals - because the penalty should keep you from spending your savings prematurely.

If you aren't comfortable locking up your money, you still have other high-yield choices. Consider online savings accounts and money market funds, which both have the benefits of safety and liquidity.

It's time to get the ball rolling on your future. Take a peak under that mattress and make sure that all your cash is working for you.