In a small pot, boil ½ cup of water and allow the saffron to steep for 5 minutes. In another pot, boil 1 cup of water.
Choose a skillet that can be tightly sealed with its lid. Melt butter over medium heat and salt butter mixture. Add in rice, and stir constantly, until rice becomes opaque. Be careful not to brown the rice.
Pour the 1 cup boiling water and the ½ cup saffron water into the skillet. Cover your pot quickly. Reduce your flame to low heat and cook rice and water for 20 minutes. Check to see if all the liquid is absorbed. Rice is ready once the water is absorbed and cooked thoroughly.
Fluff rice: Quickly pour in the remaining 1 1/2 cups of boiling water along with the saffron water. Cover immediately, reduce heat to low, and cook for 20 minutes, or until all of the liquid is absorbed. For best results, do not remove the lid while the rice is cooking.