In addition to bonds, banks and savings and loan associations have developed new ways of keeping customer assets in their financial institutions. They often offer a variety of investment plans that provide higher returns than traditional fixed-rate savings accounts. For example, many savings and loan associations allow their customers to invest in commercial paper  (uninsured promissory notes to large business entities) instead of certificates of deposit (an insured type of time deposit).

Small investors seeking greater returns may want to consider the following types of fixed-income and bond investments:

Fixed-rate certificates: In the past, federal regulations required a minimum deposit amount of $1,000 with maturities of at least four years for fixed-rate certificates of deposit (CDs). Financial institutions now set their own minimum amounts (which often range between $100 and $500) for time periods including three months, six months, one year, two years, and five years. Banks impose hefty penalties for early withdrawals. These fees can wipe out any gains you may have made.

Small-saver certificates: Deposits don’t require any minimum amount according to federal banking laws, but many banks have established a minimum requirement of deposits of $100 to $500. Maturities are generally 30 months, and the interest paid is slightly below the 30-month Treasury yield. Expect high penalties for early withdrawals.

Six-month money market certificates: These certificates are for investors with more cash ($10,000 minimum) than time. Yields are higher than those for short-term money market certificates. The interest rate paid is generally slightly higher than the six-month Treasury bill rate. Like the saver certificate, the interest rate ceiling of a six-month money market certificate is a floating interest rate until you purchase the certificate. After you purchase the certificate, the rate is locked until the certificate matures. When the certificate matures, you’re free to reinvest (rollover) your investment.

Short-term bond funds: By purchasing short-term, no-load bond funds, investors can earn higher-than-passbook returns and still have lots of liquidity. Some bond funds even have limited check-writing privileges. (Writing a check is certainly more convenient and inexpensive than placing a sell order.) With short-term bond funds, small investors tend to pay more for bonds than professional bond fund managers (who keenly watch every movement of the bond market). Bond funds come in two flavors: tax-free and taxable. If you’re in a high-income bracket, tax-free bonds might be to your advantage. However, all these benefits aren’t cost-free. Investors will incur an annual fund management fee that averages 0.2 percent. (That is, $200 for every $100,000 invested in the fund.) The Internet provides more information about fixed investments for small investors. You can discover online what the benchmark rates are and which financial institutions have the best deals. Here are a few examples:

Federally Insured Savings Network (www.fisn.com) specializes in insured certificates of deposit (CDs). The firm researches across the nation for the safest and highest CD rates. Discover definitions of fixedrate jumbo CDs, fixed-rate callable CDs, fixed-rate fixed-term CDs, and stock market CDs.