Treasury bills are really yielding yummy returns. Take a look at recent auction record: you can get 4.75% APR for your free cash on 182-day bills, and 4.50% APR on terms as short as 12 days. This beats most

Recently, I've bought a few lots of treasury bills via Fidelity. Fidelity is even better than TreasuryDirect because your money does not have to do the roundtrip flight between TreasuryDirect and your banking account -- this of course adds to your real returns.

To take advantage of increased short-term interest rates, you may want to buy U.S. Treasury bills, government obligations that mature in a year or less. Yields are around 4.5% and the interest is free from state and local income tax.

The least expensive way to buy is to go direct to the source: the U.S. Bureau of Public Debt. Since the fall, the government has made it easier to buy "T-bills" and longer-term Treasury bonds by offering online access to the Treasury-security auctions, which are held several times a month.

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Of course, you also have to weigh the securities firm's charges. Some companies charge between $40 and $50 to purchase Treasurys. Fidelity, on the other hand, charges a flat fee of $19.95 when T-bills are purchased through a representative. And since October, Fidelity has allowed clients to place online orders to be filled at the next Treasury auction at no cost.