QLike many conservative investors, I long for the days when CD rates were higher than 1 percent or less, when the government wasn't trying to manipulate me into the all too risky stock market which demonstrated in the last decade that it is not to be trusted as a secure repository for retirement savings. The "free market economy" serves those at the upper income levels, not those of us who want to live without spending precious time on keeping track and understanding basic concepts of the abyss of the investment world. It just does not interest me, and the past two years have shown how unreliable, indeed destructive, risk can be. My question is, is there a movement to promote a return to CDs offering higher interest rates?

BRIGITTE

ATo quickly get to the answer: No. I'm not aware of any movement to promote a return to higher-yielding certificates of deposit for the everyday saver. However, it's a reasonable bet that over the course of the next year or so you'll get an opportunity to earn more on your savings.

First of all, you're right to be upset over how little interest you're getting on savings. One factor is the dampening effect of the Great Recession and the anemic recovery. Another force is that inflation is essentially nonexistent with demand down sharply and unemployment at double-digit rates.

But to a large extent the low rates reflect savers bailing out the banking industry. In essence, you made a small fraction off your deposits and the banks earned easy money reinvesting the proceeds in somewhat higher yielding investments, especially in U.S. Treasuries. (Of course, it's more complicated than that, but not much.)

Fact is, bailouts stink. It's just that the alternatives are even worse. The economy does appear to be on the mend. If the recovery becomes self-sustaining you'll start earning more on your various savings accounts, including CDs.

The demand for credit grows when the economy is expanding, and that will put some upward pressure on rates. The Federal Reserve will eventually hike its benchmark interest rate when the signs are clear that the economy is healthy enough, and the shift in monetary policy will ripple throughout the fixed-income market. Inflation fears will stir during the expansion, which can push up rates. Taken altogether, and assuming a double-dip recession isn't in our future, the next move in rates will be up.

What are some safe savings alternatives to CDs in the meantime? I would look into federally insured online savings accounts, since they typically pay a better rate than their brick-and-mortar peers.

You could also look into buying short-term Treasury bills from the federal government at www.treasurydirect.gov. You won't pay any commissions. There is no credit risk with Treasuries. There is no state and local government tax levy on U.S. Treasuries. The historic record shows that short-term Treasuries will protect your money against the risk of inflation. To be sure, you won't make much interest right now but when rates start climbing you'll reinvest the money at the higher interest rates.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org.