(MONEY Magazine) – The year ahead looks ideal for conservatives -- including conservative investors. A variety of safe, income-producing securities now virtually assures a 2% to 3% annual return in 1989 after taxes and inflation. Throughout most of this century, only chancier investments have provided such a bountiful payoff. Those historically high yields available on a wide range of top-quality, fixed-income securities make them appealing for almost everyone, not just retirees and other safety-conscious coupon clippers. If, however, you are accustomed to actively trading in and out of stocks, bonds and mutual funds, you will have to learn how to sit on your hands. By holding your securities until they mature, you are guaranteed that real 2% to 3% after-tax yield, even if interest rates fall in 1989 and beyond -- as most economists predict they will. With tax-exempt securities you would end up with less only if inflation rises, but few forecasters expect that to happen in the near future. What follows is a look at the best income opportunities for investors with varying tax brackets, concerns about safety and timetables for needing their money back. Diversifying among each type of security will help shield you against the financial hazards of any particular one. You should also vary your maturities to protect yourself from risk of rising interest rates, lest the economic forecasters prove wrong. When rates on new issues rise, the value of older fixed-income securities declines, and the farther off their due dates, the more they drop in price.

MUNICIPAL BONDS Long-term tax-exempt bonds are the most rewarding of all safe income investments if your tax rate is 28% or, better yet, 33%. With the highest- quality 20-year tax-exempts recently paying 7.3%, someone in the 33% bracket would have to earn more than 10.9% from a taxable issue to end up with as much interest. Only relatively risky corporates match that return. Most investment advisers say that the best values among munis are top-rated issues with maturities longer than 10 years. Shorter-term high-grade tax- exempts are less lucrative than comparable taxable securities, while low- grade municipals don't pay enough to compensate for their additional risk. Says Neal Attermann, director of municipal bond research for Kidder Peabody: ''If you don't want to worry about losing your principal, buying and holding some 10- and 20-year AA tax-exempts is the best strategy for most people right now.'' The least expensive way to invest in munis is to buy individual bonds, typically paying a markup of about 2% over their value. But because each security comes in denominations of $5,000 or more, you will need at least $30,000 to diversify adequately. Alternatively, you can invest in a municipal bond unit trust, which holds a fixed portfolio of a dozen or so tax-exempts. Unit trusts, which often require a minimum investment of only $1,000, pay interest as frequently as once a month and are available from most major brokerage houses as well as such bond companies as John Nuveen and Van Kampen Merritt. Trusts' major drawback: an up-front sales charge of 4% to 6%. The effect of the fee on your return will be minimal, however, provided you hold on to your trust units until maturity. Regardless of whether you invest directly in bonds or in unit trusts, several considerations will help you narrow your choices. For one thing, it's generally best to own munis issued by the state you live in. Usually, interest will then be exempt from state as well as federal tax, and that can add as much as another half a point to your taxable equivalent yield. Nuveen and other investment companies offer single-state unit trusts for many states. Buying single-state bonds or unit trusts, however, may involve more credit risk if you live in a state with financial difficulties, such as Texas. But you can guard against default by buying insured bonds or trusts, which will cut your yield only about one-quarter of a percentage point. Furthermore, you should avoid munis that could be called, or redeemed, any time soon. Bonds that are callable, as most munis are, may be paid off at face value by the issuer before the maturity date. Often that happens when interest rates drop. Thus the bondholder must reinvest his money when alternative securities are yielding less. Having your bonds paid off at face value also robs you of a capital gain, since most bonds are trading at a premium when they are called. Look for new issues that can't be called for at least 10 years. Among older issues, limit your purchases to bonds or unit trusts trading at a discount.

MORTGAGE-BACKED SECURITIES Income investments with hillbilly names like Ginnie Mae and Fannie Mae are shares in pools of mortgages insured against default by a federally backed agency such as the Government National Mortgage Association. If munis are out because you are in a low bracket or because you do not want to tie up your money for more than 10 years, then mortgage-backed securities offer the highest payoffs among safe investments. Recent yields on Ginnie Maes were around 9.8%, or nearly two points more than the 8% taxable equivalent yield on 10-year munis if you are in the 15% tax bracket. In addition, the federal backing means you can be sure that a mortgage-backed security will eventually return its full face value, although, like any bond, its worth may fluctuate in the meantime. Ginnie Maes and the others come in $25,000 denominations. But Ginnie Mae unit trusts offered by such major brokerage firms as Merrill Lynch, Dean Witter and Paine Webber require minimum investments of only $1,000. The sales fee is typically 5%. Mortgage-backed securities yield as much as they do because they have a major drawback: your money may be returned to you sooner than you had planned and at a time when you would have to reinvest at a lower rate. Ginnie Maes and other such securities consist of mortgages all due to be paid off in the same year. But homeowners and others who buy real estate often pay off their loans early, either because they sell the property or because they refinance when rates drop. Such prepayments are passed through to Ginnie Mae investors as a partial return of principal along with interest. Ginnie Maes composed of 30- year mortgages usually return most of their principal in eight to 10 years, although the money can come back even sooner in the event that rates plummet. Unit trust prospectuses estimate the life spans of those investments under various possible interest-rate scenarios. Because of the prepayment problem, mortgage-backed securities don't appreciate as much as bonds do when rates fall, although they suffer as much when rates rise. So don't invest in Ginnie Maes intending to sell them before they have run their term. On the other hand, if you aren't averse to receiving principal back in unpredictable increments, their yields are hearty. One Ginnie-Mae-like investment that brokerage firms are trumpeting ought to be avoided: the so-called collateralized mortgage obligation, a bond secured by an assortment of different types of mortgage-backed securities. While most CMOs yield slightly more than Ginnie Maes do, the prepayment risk is much higher.

TREASURIES If you want to lock up your money for five to 10 years and you want absolutely no risk of prepayment along with even greater safety than you would get with a Ginnie Mae, consider bonds issued by the U.S. Treasury. Recent yields: 8.4% to 8.8%. You can buy Treasuries free of commission for as little as $1,000 by phoning a Federal Reserve bank or branch for an order form (see the story on page 137). Although the interest is subject to federal tax, it is exempt from state and local levies. Some brokerage firms offer Treasury unit trusts, but there's little need to diversify through a trust because of the federal government's guarantee.

CERTIFICATES OF DEPOSIT If you want the safety of a Treasury but don't want to lock up your cash for more than five years, the best yields are available from bank certificates of deposit. Top rates recently ranged from 9% on a one-year CD offered by the South Bergen Savings & Loan in New Jersey (201-939-3400) to 9.6% for a five- year CD at the Guaranty First Bank in Massachusetts (617-899-2100). Average CD yields nationwide are considerably lower, but transactions by mail are commonplace and easy. (See Investor's Scorecard on page 29 for a listing of the highest-paying CDs, complete with safety ratings for the banks issuing them.) With a CD, your principal is insured up to a total of $100,000, provided the institution is a member of the FDIC or FSLIC. If you withdraw your money from a bank or savings and loan CD before it matures, you may forfeit one to six months' worth of interest. Many brokerage houses now offer CDs, which they buy in volume from banks and S&Ls. Brokers usually charge no commission on CDs, and yields are above the average paid by banks. Still, the highest-paying banks pay more than brokers do. The advantage of a so-called brokered CD: you may be able to cash in early without penalty if interest rates have fallen and the broker can find a buyer for your certificate.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: Safe vehicles: Sizing up the best deals for income investors in '89 Below, from the longest term to the shortest, are the best income investments now. If rates fall as many experts predict, these yields may not be available much longer.