higher but safe interest rates

What is a source of interest rates higher than Treasury bonds but still very very safe?

Realize, of course, that when you want higher interest rates, you have to take more risk. Treasuries are backed by the U.S. govt., so pretty much anything else carries more risk.

You don’t say how much money you have, or whether you’re looking for short-term or long-term investments. Interest rates are so low right now, you might consider investing in short-term instruments until long-term rates get up off the floor.

The next safest investment would be bank money market funds and CD’s that are insured. But their interest rates are very similar (sometimes even lower) than what you’d get from Treasuries.

If you want higher rates than government, you’re going to have to look at corporate funds. Corporate money market and short/intermediate/long-term bond funds all pay somewhat higher rates than similar government funds.

Remember, all funds are not the same. The securities the funds call “high yield” are what were called “junk bonds” in the 1980s. Only you can assess the amount of risk you’re willing to take.

Hate for this to sound like a commercial, but right now a fairly high interest, safe “investment” is opening a savings account with ING Direct online.
They’ve got something like a 4.20% interest rate now, no fees or minimum balance. Before interest rates started dropping, it was at 6.50%.
Admittedly it’s not the highest ROI, but for being a savings account, it’s excellent. Better than most CDs or Money Market Accounts last time I looked.
It’s FDIC insured and very liquid, you just need a few days for the ACH transfer to clear and the money is in your checking account. Downside is that it’s a variable rate, so it can drop at any time.

For more info:
http://home.ingdirect.com/

I’ve got some money in a 1st trust deed fund. This fund lends only to developers, and a top loan-to-value of 75%. The loans are short-term (typically 1-2 years) and the interest rates are high. The fund is paying an average of about 12.5% this year. This particular fund is open only to residents of Nevada, but I am sure there are dozens like it all over the country.
As far as risk goes, I consider it riskier than bonds or money markets, yet safer than stocks. If a borrower defaults, the fund assumes ownership of the property and will sell it off to pay its investors. If the real estate market is slumping badly, then you have real risk as an investor. But if the real estate market is stable or expanding, then the risk is pretty small – even if a borrower defaults, the property will sell quickly (and the fund doesn’t have to get the entire value for the property, just enough to pay back the investors).
Depending on how much you have to invest, you could enter such a fund, or you could even become a 1st trust deed lender. You could buy 1st trust deeds from banks that actually originate the loans, and collect the principal and interest payments. You could also lend out money as 2nd trust deeds, interest only, for a specified period.
Just my two cents, and worth about as much…

Has anyone else noticed over the last 10 years that when interest rates have gone down, savings account yields have also gone down, but when interest rates have gone up, savings account yields have stayed the same?

Back in 1995 I was getting 4 percent on a savings account in upstate New York. By '99, even though the Fed had jacked up interest rates twice (once that year and once two years earlier), the yield was 3.25 percent. These days, I don’t think you can get 3.25 percent anywhere.

If this is a real phenomenon and not just my imagination, someone needs to blow the lid off it.