  We present the design, bench-top setup, and experimental results of a compact
heterodyne interferometer that achieves picometer-level displacement
sensitivities in air over frequencies above 100 mHz. The optical configuration
with spatially separated beams prevents frequency and polarization mixing, and
therefore eliminates periodic errors. The interferometer is designed to
maximize common-mode optical laser beam paths to obtain high rejection of
environmental disturbances, such as temperature fluctuations and acoustics. The
results of our experiments demonstrate the short- and long-term stabilities of
the system during stationary and dynamic measurements. In addition, we provide
measurements that compare our interferometer prototype with a commercial
system, verifying our higher sensitivity of 3\,pm, higher thermal stability by
a factor of two, and periodic-error-free performance.
