The problem: How to get a decent interest rate on a safe investment – above 4 percent, let’s say – when most bank savings and money market funds are paying only 1 percent to 2 percent.

The solution: U.S. Savings Bonds – assuming you can afford to tie your money up at least a year, don’t need steady income and can move fast.

We’re at the time when investors have to decide whether to buy the batch that’s been on sale since May 1 or to wait for the new ones coming Nov. 1.

People who expect to keep their bonds for at least five years should probably get EE bonds, either now or after Nov. 1, says Daniel J. Pederson, author of “Savings Bonds: When to Hold, when to Fold and Everything in Between.”

Investors who expect to hold their bonds for one to five years, will probably do better with inflation-indexed bonds – and should hurry to get I bonds issued before Nov. 1, he says.

They will pay an annual rate of 4.66 percent for the first six months, a good return in today’s market.

That rate comes in two parts: a fixed rate of 1.1 percent that will stay the same for the bond’s 30-year life and a floating rate that is currently 3.54 percent. This part of the total return is based on the nation’s annual inflation rate from Nov. 1, 2002, to April 30.

Once you own an I bond, the floating rate is changed every six months according to inflation. But if you buy now, at least you’ll get the 4.66 rate for six months.

For bonds issued after Nov. 1, Pederson expects the fixed portion to stay about where it is but the floating rate to be as low as 0.3 percent.

That means the combined return likely will be no more than 1.5 percent to 2.0 percent, he says.

“If an investor is already thinking of buying the I bond, I would buy it before Nov. 1,” he said.

Rates on EE bonds are adjusted every six months to equal 90 percent of the average yield on five-year Treasury bonds.

EEs have been paying 2.66 percent since May 1 and will probably stay at about that level Nov. 1, Pederson says.

The choice, he says, boils down to one’s investing horizon.

Investors with a short horizon of one to five years might do better with I bonds if they can get the current 4.66 percent rate for the first six months.

But this initial advantage over EE bonds is less significant for long-term holders, who are better off betting on EE bonds’ tendency to pay 2 points more than inflation.

Remember:

Savings bonds cannot be redeemed until they have been owned for at least 12 months, and if they are redeemed within the first five years, you give up the last three months’ interest earnings.

Savings bonds do not make regular interest payments. Instead, the interest builds up, compounds and is collected only when the owner redeems the bond.

They’re no good for people who need steady income.

On the other hand, savings bonds are very safe.