I am setting up an estate account for my mother's money-can I put some of this money in a short term cd getting a much better rate until the estate is settled? Does the cd have to be at the same bank where I open up the estate account?

There aren't any restrictions on what you can invest the estate's assets in, as long as you invest in a reasonably prudent way. So yes, you can invest in CDs, and do it some place other than where you set up the estate's checking account. However, be sure to consider the liquidity of CDs - you don't want to be trapped in an investment that prevents you from getting cash for the estate's expenses, or that limit your ability to ultimately distribute the assets to the heirs.