BOSTON (MarketWatch) — Sorry, Grandma. You’re getting the shaft from Uncle Sam.

If you save your money in certificates of deposit, or short-term bonds, you’ll earn next to nothing. And you’ll lose purchasing power each year as inflation eats away at your money.

If you try to earn a little more by owning long-term bonds, or higher-yield ones, you’ll be putting yourself at risk. Both those types of bonds involve risk. Long-term bonds can get hit badly by inflation. High-yield bonds are typically issued by companies with weaker finances. They are vulnerable in a downturn.

What can you do?

Hey Grandma! Uncle Ben wants YOU to invest in stocks. Photoillustration by Suzan Kaplan

Uncle Sam, effectively, is telling you to invest in the stock market.

It’s grossly unfair, especially at a stage in your life where you probably don’t want to do any such thing.

But we have to play the hands we are dealt, rather than the ones we want.

I’ve been scanning the ranks of blue-chip stocks, and here is some good news: There are plenty of sound, solid, large-cap companies out there which now pay you more — often much more — than Treasury bonds.

Yes, these are stocks, not cash or bonds. They can go down as well as up.

But these are top quality blue-chip stocks with high profit levels. If you hold a basket of them, your overall risks aren’t that high. Any volatility is likely to be short-term.

And on the positive side, most stock dividend income, unlike bond income, is taxed lightly, at special rates: 5% or 15%.

Looking down the list, one remarkable name leaps out: Microsoft MSFT, +1.48% .

Yes, Mr. Softy now has a higher yield than Uncle Sam. Microsoft’s dividends now yield 2.4%, compared to the mere 2.15% you’ll earn on 10-year Treasury notes TMUBMUSD10Y, 0.693% .

It’s a sign of how low Treasury yields are today — and how far Microsoft has fallen since the days when it was Wall Street’s favorite growth stock.

The company has fared badly in the past decade, under the leadership of Bill Gates’ successor, Steve Ballmer. How he remains in his job is one of Wall Street’s enduring mysteries.

But from the point of view of a value investor, someone who just wants income rather than growth, that’s a bit of a moot point. Microsoft remains highly profitable in its core businesses. Its $5.2 billion in dividends last financial year were covered five times over by operating cash flow.

Beyond Mr. Softy, the ranks of blue-chip dividend stocks look pretty thick, thanks in part to this summer’s sell-off. For illustrations, consider that Johnson & Johnson JNJ, +1.23% stock now yields 3.4%, Coca-Cola KO, +0.92% 2.6%, drugs giant Pfizer PFE, +1.46% 4.1%, Wal-Mart WMT, +2.02% 2.6%, Exxon Mobil XOM, +0.14% 2.5%, Procter & Gamble PG, +1.26% 3.2%, Chevron CVX, +0.13% 3%, PepsiCo PEP, +1.05% 3.1%, and Abbott Labs ABT, +3.46% 3.5%.

I only picked those names because they all crop up near the top of Jeremy Grantham’s favorite “high quality U.S. companies.” Grantham’s Boston fund firm, GMO, tracks companies with the strongest balance sheets and fundamentals. Those names are all on the list.

If you want to cast your net a bit wider, a FactSet screen of dividend blue chips include the likes of AT&T T, +0.74% 6.1%, Verizon VZ, +0.42% 5.5%, Eli Lilly LLY, +1.20% 5.3%, Kleenex’s Kimberly-Clark KMB, +0.90% 3.9%, whole swathes of utilities, Patriot missile maker Raytheon RTN, 3.8%, and all sorts of kitchen-table giants like Kraft KFT 3.8%, Heinz HNZ 3.5%, General Mills GIS, +3.04% and Kellogg K, +1.81% both 3%.

I’m not even looking at really great foreign stocks, though London-based cellular giant Vodafone VOD, +0.37% (VOD), which owns 45% of Verizon Wireless, yielding 5.4%, and, for example, Nestle NSRGY, +0.16% (NESN) yields 3.7%.

The point is not that any one or two or three of these are conservative investments. It’s that a broad basket, from different industries, would surely meet that standard.