After three years of losses, the stock market is scary. Bonds did well last year but could rack up big losses if interest rates go up. And bank savings and money-market funds offer interest rates flirting with zero.

So, if you have new savings to put to work, where should it go?

If you’re a homeowner, perhaps you should invest it there.

First, though, make sure you’re putting all you can into your 401(k) or similar retirement account. Even if stock and bond funds don’t appeal to you just now, you can’t beat the benefits of tax deferral on contributions made by you and your boss. You can get those even if you just tuck the contributions into a safe money-market fund.

And now, for that home investment … here’s the easy way and the hard way, each with pluses and minuses.

The easy way is to make extra principal payments on your mortgage. This can slash the amount of interest you pay over the life of the loan.

If you had a brand-new, 30-year $100,000 mortgage at 6 percent, and you put an extra $100 a month into principal payments, you could pay the loan off nine years early and save almost $40,000 in interest.

Basically, extra principal payments “earn” an investment return equal to your interest rate — 6 percent in this case. Try beating that with any other guaranteed investment these days.

The drawback?

This money is tied up. You’d have to sell the house or get a new loan to recover your money. To gauge the effect of extra principal payments, try the calculator at www.hsh.com/calculators.html.

Now for the hard way to put money into a home — home improvements.

Granted, this involves a lot of tough decision-making. But redecorating, remodeling or adding on are investments you can really enjoy.

Can you make money on them?

That’s tough if you hire expensive pros to do everything. But the odds improve if home prices in your area are rising rapidly, according to an annual “Cost vs. Value Report” put out by Remodeling magazine.

With home prices soaring in many parts of the country, the profit potential in home improvements is especially good right now.

The magazine’s annual survey examines the costs of common home improvements and collects local real-estate brokers’ views on how the upgrades would affect the homes’ sales prices after one year.

The result is a figure representing the percentage of the improvement cost that can be recouped in a home sale after 12 months. Find the report at remodelingonline.yellowbrix.com/.

The return varies considerably. In high-priced Honolulu, a kitchen remodeling is estimated to return 136 percent of its cost after one year, while it would return only 50 percent in modest Las Vegas.

Among the best improvements, based on nationwide averages:

Bathroom addition or two-story additions, 94 percent.

Bath remodeling, 88 percent to 91 percent.

Major kitchen remodeling, 80 percent.

At the other end of the scale, creating a home office may return only 55 percent of the cost after one year. It returned just 18 percent in depressed Passaic, N.J., but 110 percent in booming San Francisco.

Building a sunroom was also a money-loser, with only 60 percent of the cost recouped nationwide. Only 24 percent of the cost was recovered in Albuquerque, N.M.

As I said, the survey assumed all work was done by professionals. Around the country, labor costs probably vary more than materials costs. So, if labor is expensive where you live, doing some or all of the work yourself could dramatically improve your odds of turning a profit.

Of course, that assumes your work will look professional to a buyer.

Also remember that although the survey suggests many projects do not pay for themselves after one year, the chances of recouping costs and turning a profit get better if you wait longer to sell.

And in the meantime, you’d enjoy that wonderful new kitchen.