 Investors who rely on bank interest have seen their income more than half over the past two years, but as Nick Bruny explains there's an alternative that pays higher returns that most of us know nothing about. It's been great news for borrowers lately because interest rates have never been lower. But spare a thought for those who are on the other side of the fence and rely on bank interest for income. Very low interest rates, getting smaller I suppose, negative interest rates, it's pretty tough well to make a decent return. The good news is there's an alternative that the big boys use all the time. They're called bonds and they usually pay rates much higher than bank accounts. The bad news is that they're not as safe as a bank account. A bond is very simply a loan from an investor to a government or a large business. The loan pays periodic interest either four times or twice a year and at the end of the loan the investor gets their capital back. Well I've got a fairly conservative portfolio, risk averse I suppose, it's about six percent over the loan. That's pretty good. Yeah, I think it's pretty good. We manage the increased risk of bonds by spreading the money around with lots of different companies. It's a bit like buying a bag of apples instead of just one. That way if one goes bad we can always enjoy the others. You might not realise it but your super fund uses bonds issued by governments and businesses all the time. A conservative super fund might have more than three quarters of all your money invested in bonds and that's why some super funds have been doing quite well over the past year. Every day investors can invest in bonds through a stockbroker or through a managed investment fund but like any investment that's new to you get some professionalism before you jump in. If you want to find out more the Australian Stock Exchange website is a good starting point. Nick Bruning, 7 News.