Guaranteed Fixed Annuity Rates
Last Updated May 20, 2009
*Rate slightly lower for deposits under minimums if applicable
Please verify all rates. Rates are subject to change daily and no rate shown is guaranteed. Products not available in all States.
No Annuity will be sold without client suitability being verified and all policy provisions and riders being understood.
Fixed Deferred Annuity or Bank CD- Which is Right for You?
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Choosing how to invest your money for retirement is always a challenge. You understand the need to diversify your portfolio. You want to reduce your exposure to risk, but still want to get the highest return possible.
The fixed deferred annuity and Certificate of Deposit (CD) are two popular, conservative investment options, which tend to be compared to one another. Look at the differences below.
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Investment Considerations
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Fixed Deferred Annuity
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CD
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Investment Level of Risk
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Low
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Low
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Taxation
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Not taxed until money is withdrawn. You benefit from the advantages of compounding interest by:
- Earning interest on principal
- Earning interest on the interest
- Earning interest on the money that would have been lost to current income taxes
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Taxed in the year is earned, even if you don’t take money out.
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Guaranteed principal(1)
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Yes – subject to claims-paying ability of insurance company
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Limited guarantee – FDIC insurance up to the applicable limit
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Money is free of market risk and price fluctuation
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Yes – fixed rates; interest rates credited have the potential to change over time, but are guaranteed not to be less than the guaranteed minimum interest rate stated in the contract
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Yes – fixed rate; rate does not have potential to change
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Interest free from current taxes
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Yes – not taxed until money is withdrawn
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No – interest is taxed each year
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Guaranteed minimum interest rate
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Insurance company sets a minimum rate so they cannot go below a certain rate
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Interest rates will vary depending on current market conditions and the length of time to maturity
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Avoids probate
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Yes – the annuity is passed straight to named beneficiary
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No – goes through probate
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Able to take cash withdrawals without penalty
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Generally able to withdraw a portion of account value, usually 10% a year, without a surrender charge(2)
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If you withdraw money prior to the maturity date, you may pay an interest penalty
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Guaranteed lifetime income with additional tax benefits
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Yes
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No
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Capable of stretching to a beneficiary
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Yes
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No
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1Guarantees dependent upon the claims-paying ability of the Life Insurance Company.
2 Values withdrawn prior to age 591/2 may be subject to a 10% IRS penalty tax.
Annuities are not insured by the FDIC, are not obligations or deposits of any bank, nor guaranteed by any bank and involve risk, including the possible loss of principal invested if the issuing insurance company is unable to meet its obligation.
If you are purchasing an annuity to fund a tax-qualified retirement plan (IRA) you should be aware that this tax deferral feature is available with any investment vehicle and not unique to an annuity. Carefully consider the features and benefits of the annuity in making the decision to purchase it.
