WRT "too much cash" is a cash account. I'm rashly presuming "cash account" translates into what we call a "savings account" in the US. A simple account that you put money into, the bank pays interest on, and there are essentially no restrictions beyond that.
I'd say that having more than $5000 in that kind of account could be excessive. Convenient--but excessive. Consider that until the first of this year, those accounts were paying typically 2-4% in the US, with 4% being the "online" accounts that you have to access via some other checking account with up to a three day lag in availability. In contrast, simple CD's were paying 5% and more even on low notes like $1000 or $2500.
So if you take out a number of $2500 CD's, typically paying twice the usual savings acocunt interest, you still have that money "at hand" and in the worst case you will lose 90 days simple interest on the note if you pull it out. Running the numbers, you'd
lost 1/4 of 5% interest on the CD, that's 1-1/4% or $12.50 per thousand, if you had to break the note. But after a mere six months--the note would have paid you all that the savings account pays in an entire year! So if you can make it for just six months without touching that money, it doesn't matter if there's an early withdrawl penalty. And by keeping it in multiple small CDs instead of one "jumbo", you ensure that you can take out just what you need--without creating a huge penalty on the jumbo.
Credit Unions also are typically a full percent or more ahead of banks in the US, it may take some looking around to find one that you are eligible to join, but many have open enrollment for "friends" of existing members once per year.
I will readily concede that you can do better on "jumbo" CD's. I think the best small CD rates were around 4% a full month ago, while jumbos were pushing 8% (by brokers, not at the corner bank). But that's not the point here. Even the small CD's will do better than "savings" accounts, even online savings accounts, and if played properly the penalty is nothing to worry about. The accounts are also fully insured, and not subject to market losses--as an eTrade or other mutual fund account will be.
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