Interest rates are a big deal. To borrowers, they represent a burden that must be borne if they want to purchase big ticket items like a house or car. Consumers love low rates while loathing high ones. When I bought my first house in 2008, my mortgage rate stood north of 6%. Now it’s under 4%. Falling rates freed up hundreds of dollars a month for millions of other homeowners and me. And we have the Fed to thank for the savings.

And speaking of savings, let’s talk about savers. To these money stashers, interest rates represent a golden goose that lays eggs of varying sizes. In lean times like 2009 to 2014, the goose can’t produce, regardless of how much money you have stowed away. But in good times when the Fed lifts interest rates, the goose begins to work his magic. I first experienced this in 2007 when I started to see $50 to $100 pop into my brokerage account every month due to capturing interest on my idle cash. Oh, the glory days of a Fed Funds over 5%. Unless inflation has been banished forever, I suspect we will someday return the high rates of decades past.

Nothing makes a savings account sexier than the promise of 5% gains.

On Wall Street, the interest rate that makes an appearance in pricing models (hello, black scholes) and is used to assess portfolio performance accurately is called the risk-free rate. It is the baseline for what you should expect to get as a return on your money. By definition, the risk-free rate is the return you get when buying a hypothetical risk-free investment. It’s theoretical because in the real world every investment has a risk of some sort. But the safest thing you can buy on the planet is a U.S. Treasury bill or T-bill for short. So that’s what the Street uses to determine the risk-free rate.

Here’s a snapshot of the U.S. Treasury Yield Curve Rates:

Currently, the yield on 1-month to 3-month T-bills is 2.41%. Essentially, that’s the annual rate of return an investor can get today without taking any risk. All you have to do is keep reinvesting your cash into T-bills, and by the end of the year you will have scored a 2.41% return on your money.

And for those scoffing at the “measly” 2.41%, you must understand this is the highest rates have been in a decade! So compared to the zero point nothing stuffed down the beaks of cash holders for years, 2.41% is downright tantalizing.

The Adjustment

The proper way to think about investment returns is by comparison to the risk-free rate. If you took a whole bunch of risk and ended with a 3% return for the year, then it’s hard to pat yourself on the back when you could have taken ZERO risks and received 2.41%. What Wall Street considers a “good” return will vary from year-to-year depending on what the yield on T-bills sits at. If the yield is zero, then taking risk and making a 5% annualized return is excellent. If the yield is 5%, then all of a sudden your efforts to take risk and still only capture a 5% return doesn’t look so hot. You could have received the same gain by throwing all your dough in T-bills and laying in a hammock on the beach all year.

Risk-Free Money? Where do I Sign Up?

Investors looking to capture this risk-free rate have a few avenues for doing so.

First, you could actually set up an account at TreasuryDirect and buy T-bills directly from Uncle Sam during the regular auctions that are held.

Second, you could shop around for a high-yield savings account. You won’t get the same rate as a T-bill, but it will be close. For example, right now 3-month T-bills yield 2.41%, and Ally Bank offers a savings accounts that offers 2.20%.

Third, you could buy a T-bill ETF in your brokerage account. Take a look at BIL which boasts a dividend yield of 2.10% that should continue to climb toward 2.40%.

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