Since you’ve got nearly 3 years, def. put it in the highest-interest yield CD you can find. My US bank recently announced 13 month CDs yielding 4% Assuming you will ladder savings, a plan could be:

1. Accumulate into an interest-bearing savings account. 1.5% seems to be current high average in USA from what I’ve seen recently.

2. Roll over incrementally into highest-yield CDs so the money will be available just before you travel. For example, if your travel is 3 years off, put your first $500 (or $1000, or whatever minimum your bank requires) into a 36 month CD. Longer duration typically yields higher interest, but not always. Anything above 4% would be great right now. However if you can get 4% on a shorter duration, then do that because I doubt rates will drop much—if any—in the near future—and could actually go up slightly.

3. This might help you make another $400-$500 without any extra work! (I’m guessing your budget for a 3.5 month trip).

I hope this doesn’t come across as patronizing—just trying to offer some additional ideas you might not have considered. I wouldn’t be surprised if you’re already on top of all this since you’ve begun saving toward a 2008 trip!

Don,

Which US bank was this with the 4%? Thanks.

Here are several showing up on Bankrate.com: roduct=15&sort=3” title=“www.bankrate.com/brm/rate/high_ratehome.asp?params=US,416&amproduct=15&sort=3”>www.bankrate.com/brm…