NEW YORK (Bloomberg) — The US government's bailout of financial firms through the Troubled Asset Relief Programme provided taxpayers with higher returns than yields paid on 30-year Treasury bonds — enough money to fund the Securities and Exchange Commission for the next two decades.

The government has earned $25.2 billion on its investment of $309 billion in banks and insurance companies, an 8.2 percent return over two years, according to data compiled by Bloomberg. That beat US Treasuries, high-yield savings accounts, money-market funds and certificates of deposit. Investing in the stock market or gold would have paid off better.

When the government first announced its intention to plough funds into the nation's banks in October 2008 to resuscitate the financial system, many expected it to lose hundreds of billions of dollars. Two years later TARP's bank and insurance investments have made money, and about two-thirds of the funds have been paid back. Yet Democrats are struggling to turn those gains into political capital, and the indirect costs of propping up banks could have longer-term consequences for the economy.

"From the perspective of the taxpayers getting their money back, TARP has been a great success," said Todd Petzel, chief investment officer at New York-based Offit Capital Advisors LLC, which has more than $5 billion of assets under management. "But there are other costs as the government made it possible for the banks to pay back TARP. Those costs can turn out to be larger, and their legacy could last longer."

Banks benefited from dozens of other programmes instituted by the Federal Reserve and the US Treasury Department during the worst financial crisis since the Great Depression, from the purchase of mortgage-backed securities to the bailout of home-lending giants Fannie Mae and Freddie Mac. The suppression of interest rates at close to zero for most of the last two years has also boosted banks' income, enabling them to borrow money at almost no cost and lend at higher rates.

Those low rates drove down yields on instruments used by American savers. US Treasury 30-year bonds yielded an average of 4.1 percent from October 20, 2008, through yesterday, according to Bloomberg data. When the price appreciation of the bonds is taken into account, the return for the two years is 13.9 percent.

Two-year Treasury notes fared even worse. They returned 6.2 percent over two years, yielding less than one percent on average.

Average rates for high-yield savings accounts, which generally have at least $10,000 in deposits and are insured by the Federal Deposit Insurance Corp., have ranged from 0.36 percent to 0.92 percent over the past two years, based on data from research firm Market Rates Insight in San Anselmo, California. A two-year CD purchased in October 2008 returned 2.8 percent annually, according to Bankrate.com, the North Palm Beach, Florida-based website that tracks bank products.

Taxable money-market funds, sold by brokerage firms and not FDIC-insured, offered cumulative returns of 0.5 percent for the two years beginning September 2008, based on data from iMoneyNet, a research firm in Westborough, Massachusetts.

Better performers include the stock market, with the Standard & Poor's 500 Index gaining 24 percent in the two years since October 20, 2008. SPDR Gold Trust, a gold exchange-traded fund, offered a total return of 66 percent, according to Bloomberg data.

The $25 billion TARP return could fund the SEC for more than 20 years, based on the agency's proposed 2011 fiscal year budget. It could pay for all farm subsidies in the US for more than two years. Bloomberg compiled the TARP data from reports by the Treasury, FDIC and the Office of the Special Inspector General for the Troubled Asset Relief Program.

"I am surprised at the numbers because the consensus seemed to be we threw good money after bad and wouldn't get repaid," said Jane King, president of Fairfield Financial Advisors Ltd., a Wellesley, Massachusetts-based fee-only firm whose clients have $5 million to $10 million in net worth.

The Treasury said in an October 5 report that it expects to lose about $17 billion on the separate $80 billion TARP payout to Detroit automakers General Motors Co. and Chrysler LLC. The bank and insurance portion of the bailout, which includes $47.5 billion to New York-based American International Group Inc., will probably earn $11 billion in the end, taking expected losses into account, according to Treasury estimates.

One of the biggest investments produced one of the best returns. While New York-based Citigroup Inc. still hasn't paid back $12 billion of the $45 billion it received, Treasury has already made $8.2 billion, or an 18 percent return, mostly as a result of selling its stake in the lender at a higher price, according to data analysed by Bloomberg.