• No one alternative consistently pays higher interest than others.money graph image by Sid Viswakumar from Fotolia.com
  
  Money market funds are mutual funds that invest in money market instruments: commercial paper, repurchase agreements and jumbo CDs. Investors like them for safety (although not FDIC-insured, money market funds keep their share price constant at $1), liquidity, and historically higher yields than most comparable bank accounts and many CDs. But many money market funds are currently paying next to nothing. Understandably, investors are seeking higher yields elsewhere. The best thing to do is to shop around; there is no one alternative that consistently pays higher interest than others.
  
  

Bank Money Market Accounts

• These may be alternately called “high yield savings,” “high yield checking” or simply “online savings” or “online checking,” but the common feature is higher yields than from most money market funds. The key is to shop around and move your money around: there is no one bank that consistently beats other banks’ yields for an extended period of time. Check Bankrate.com for the highest rates nationally.
  
  

Short-Term Corporate Bonds

• Once issued, bonds trade in the secondary market until maturity. At some point, both a 20-year and a two-year bond will have, say, six months left until maturity, making them short-term instruments, akin to CDs. Although there is always a risk of default, companies don’t default overnight. By doing additional research, you can get a fairly high degree of assurance that the company whose bond you are considering is not going to go bankrupt in the next six months, almost regardless of the credit rating. You will get a higher yield than from a CD, and get back the full face value at maturity.
  
  

Brokered CDs

• Many brokers offer FDIC-insured CDs from multiple banks nationally that are seeking to raise money by offering higher yields. Going through a broker allows small banks with limited advertising budgets to reach a large national pool of wealthy investors at a small cost, so they pass some of the savings on to investors in the form of higher yields.