What is best rollover 401k into cd's or another 401k plan?
You definitely want to roll it over to a self-directed IRA, where you'll be able to invest in stocks, bonds, mutual funds, annuities, and yes, even CDs. Stay away from the bank, their idea of a good return on an IRA is a 5% CD. No one under 55 should ever have CD's in their IRA, it's a waste of both your age (which can be a powerful weapon) and the IRA's tax-deferred status. CDs are for much older people, or for money that needs to remain somewhat liquid--which is something IRA money does not.
Despite Scuhbby's inane assertion that the average mutual fund does 16-30%(no, the average mutual fund loses money), mutual funds are absolutely the way to go. Pick a broadly diversifed mix of assets classes, cover all your bases, and remember to rebalance every year. A financial advisor might be able to help you with this, but if you have the tools, talent, and time to do it yourself, go for it. And oh yeah, the discipline, which is the most important.
Make sure you hit all the asset classes, such as large-, mid- and small-cap stocks, international stocks, investment grade and hi-yield debt, foreign debt, commodities, real estate, and precious metals. Come up with a mix you're comfortable with, and sit back. A properly allocated diversified portfolio will average 8-12% return per year, on average, and you'll be able to take advantage of the IRA's tax-deferred status.
MOST IMPORTANT, if you qualify income-level wise, IMMEDIATELY look into converting your IRA (once you've rolled over the 401k) to a ROTH IRA. Thus, not only will your preserve your tax-exempt status year-to-year, you'll also ensure all future earnings will be 100% TAX-FREE. Even a normal IRA/401k requires you to pay taxes when you take distributions. Converting could have some current year tax consequences, so consult a financial advisor for your specifics, but in nearly every case I have found it to be worth it.
Hope this helps!