For all the recent fretting about rising interest rates, you d think at least one group would be celebrating: risk-averse investors in short-term bank certificates of deposit and money-market funds. Interest rates are indeed rising, topping 3.7% last week for 10-year Treasurys, and hitting 4.6% for the 30-year. Yet CD yields remain stubbornly low.

This is great news for the nation s beleaguered banks, for whom a steep yield curve is a proven formula for higher profits. No wonder bank stocks have done so well this year, with plenty of room for further gains, in my view. But it s not great news for people like my mother, who depends on the interest from CDs for much of her income, and has watched the yields plunge from over 4% on two-year CDs to just over 2% now.

In discussions with her and her broker, we gave considerable thought to adding a little more risk to her portfolio in order to boost the yield. But ultimately we concluded the additional risk in her case just wasn t worth the loss of peace of mind. Yes, she wanted more income and she wanted safety. Her ladder of two-year CDs provided welcome stability last year as the market plunged. After every dizzying dive, I was able to reassure her that everything she needed was tucked safely in federally-insured certificates of deposit. That reassurance was worth a lot.

Yet that fails to solve the immediate need to generate more income, a problem many fixed-income investors are now facing. The conventional approach is to move further out on the maturity scale, extending a CD s term in order to lock in higher yields. But the recent sharp rise in Treasury yields hasn t been mirrored in CD yields. When I checked this week, the national averages were 2.1% for one-year CDs, 2.3% for two-year, and 3.1% for five-year. Moreover, the longer the maturity, the higher the risk to erosion of principal if interest rates rise. Investors in longer term U.S. Treasurys have already suffered an 18% drop this year in the value of their bonds. This doesn t matter so much if all you need is the income, but it s still dispiriting to see the value of your bonds decline.

In this environment, I have a suggestion that bucks the conventional wisdom: Instead of lengthening maturities, shorten them. You don t have to give up all that much income; you don t have to worry about rising interest rates eroding your principal; and the short maturities guarantee that, in the event CD rates do rise, you ll be in a position to take advantage of them when your CDs mature.

When I checked this week on rates for six-month CDs, I found numerous banks offering just under 2%, negligibly less than the rate for one- and two-year CDs. I don t see any need to go shorter than six months, which will nearly take us to the end of the year, and provide enough time for CD rates to catch up to rising Treasury yields. There s little or no downside risk. If yields don t rise, your principal will still be safe, and you can simply continue the short-term strategy until they do. If they do rise, you can again extend the maturities and take advantage of higher yields.

The trade-off is slightly less current income, but only very slightly. If you are indeed risk averse and in my view, everyone over 50 should have at least some assets that are virtually risk free you simply have to accept that in this environment, you can t have higher yields without sacrificing safety. In my mother s case, she may have to spend some principal in order to maintain her standard of living. But it s only for the next six months, at which time we can re-evaluate the risk-reward equation.

Many investors are putting the trauma of last year behind them and re-embracing risk, which to some extent is healthy. But the danger of further volatility has hardly vanished. I don t like to forecast interest rates any more than I do stock prices, but the case for higher interest rates in the not-too-distant future strikes me as pretty compelling. Short-term CDs are an almost risk-free strategy for being prepared.