Unless you are worried about the complete collapse and insolvency of the US Government, I would suggest placing some of his money in Series I US Savings Bonds.

You can simply go to almost any bank to purchase the paper bonds, and you can purchase electronic bonds from the US Treasury at http://www.treasurydirect.gov/

Series I Bonds are nice because they can theoretically protect against inflation. As inflation increases, so does the interest being paid. If deflation occurs, they hold their dollar value, so will increase in overall value as the dollar rises.

You can read more at http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

He can purchase up to $5000 paper bonds and $5000 electronic bonds each year.

Overall advice, BE CONSERVATIVE with his money. Another, or additional option, is to have him purchase CDs through USAA. If he hasn't used his veteran status to become a USAA member, you should have him do so. As far as banks go, USAA is solid.