With interest rates soaring, it's time for the investor of as little as $1,000 to become astute.

Once, the small-timer with big aspirations had poor pickings. Treasury bills, a favorite short-term repository for large institutional investors, require minimum investments of close to $10,000. The prudent man was stuck with a 5 percent passbook savings account or savings bonds.But with the deregulation of banking, beginning in th late 1970s, interest rate caps were eliminated. Concurrently, mutual funds became far more aggressive in their offerings of savings-type accounts. Now, virtually anyone with a piggy bank can get out a hammer and use the loot for an abundant, occasionally bewildering, array of investment opportunities that carry little risk.

The recent surge in interest rates has made historically high returns simple to come by, though not automatic. Indeed, the financial markets, despite a common product, appear to be far from efficient. Returns differ markedly between institutions, instruments and geographic location. Thus, some, but not much, research is required.

Unfortunately, the easiest vehicle is the least promising. Bombarded by literature in monthly statements and lured by prominent displays each time they cashed a check, many people opened money market accounts at their local bank branch. These accounts are convenient and flexible but hardly generous.

"The fastest three-way game in town is whether to invest in bank certificates of deposit, money market mutual funds, or U.S. Treasury bills," said Robert Heady, publisher of the Bank Rate Monitor and 100 Highest Yields, two North Palm Beach, Fla., publications that conduct surveys of bank offerings.

All three are safe, Heady said. The critical differences are in rates and liquidity - the technical term for ease of redemption.

Money market mutual funds tend to allow for easy redemption, and an active market exists for Treasury bills (although because of their large denomination, $10,000 and up, they are out of reach for many).

Certificates of deposits are the most inflexible of these investments. They are issued by banks and thrifts for set time periods. Early redemption often triggers harsh penalties, such as the forfeiture of several months interest.

But certificates of deposit have the advantage of being easily obtainable, and the rates may be compelling, particularly if the buyer is willing to shop around. Many, but not all, thrifts and banks allow out-of-state purchases, Heady said. His 100 Highest Yields publishes phone numbers in addition to rates for surveyed banks.

For those hesitant to deal with out-of-town institutions, a national market in certificates of deposit is provided by institutions such as Boston-based Fidelity Investments, the discount brokerage unit of T. Rowe Price, and a number of brokerage firms. Buyers should ask if any fees are attached (there may be none).

Getting access to diverse markets is critical because rates vary widely. In the 10 largest markets, the average yield for a six-month certificate of deposit is 9.17 percent (adjusted to an annual basis), but local averages range from 8.86 in Chicago to 9.66 in Boston.

How much banks are willing to pay is determined in part by prevailing rates on other credit instruments, which in turn is influenced by broad economic events. But the differences in the returns in various regions of the country results from a second factor - the competition between institutions for funds. "Banks pay only what they can get away with," Heady said.

He predicted rates will rise during the next few weeks as banks compete for the annual flood of investable dollars that is set loose each year at tax time.

"The smartest advice for the consumer with an extra thousand dollars burning a hole in his pocket is to temporarily park their money into a high-yielding money market mutual fund, or money market bank account, until the second or third week of April," Heady said.

"More than $100 million in certificates of deposit mature and are up for grabs. Banks, knowing that they must protect their market share, are currently pushing rates upward at a fast clip."

That will end, Heady predicted, in the latter half of April, when the competition cools off. Rates available to future purchasers will slowly settle, he said. The scenario for lower rates is most vigorously advocated by economists who foresee a recession.

Any drop in rates will not affect the return for those already holding certificates of deposit, but it will hurt those in money market mutual funds. These funds typically are stocked with an array of securities - some expiring and others being acquired. As a result, they are sensitive to fluctuating rates.

Conversely, if the economy remains healthy and rates remain high,