CD vs Fixed Annuity

To start off…




Safety of Principal


Deferred fixed annuities are issued by insurance companies and are not insured by the U.S. government. They are backed by the financial strength of the issuing insurance company, regardless of the amount. Therefore, before purchasing an annuity, you should make sure the issuing insurance company is financially sound. You can determine financial strength by requesting the findings of independent rating companies such as Moody’s, A.M. Best, Standard & Poor’s and Fitch. These companies evaluate the financial strength of insurance companies and publish ratings that give their assessments of each company.

Short-term Accumulation


Long-term Accumulation

A deferred fixed annuity is generally the product of choice for the long haul. Deferred fixed annuities are designed to help accumulate money for retirement or to protect funds already saved once you’ve reached retirement. In later years, a deferred fixed annuity is usually more flexible for accessing your money. They can even be used to provide a legacy for your heirs.

Tax Savings


Earnings on CDs are taxable in the year the interest is earned, even if you don’t take the money out. With deferred fixed annuities, earnings accumulate tax–deferred and are not treated as taxable income until they are withdrawn, which gives you a measure of control over when you pay taxes.




This is for informational purposes only and should not be construed as tax advice. Please consult with your tax advisor.


If you need access to the funds in a CD prior to the maturity date, you may pay an interest penalty ranging from 30 days’ to six months’ interest. Of course, you can limit your exposure to surrender penalties by investing in several CDs with staggered maturity dates.


#jq_fmslideshow #fmslideshow .txtSpecial { text-shadow:none; font-weight:400; font-size:16px; color:#BC9456; display:inline-block; padding:10px; } #jq_fmslideshow #fmslideshow .txtExSpecial { text-shadow:none; font-style:italic; font-size:16px; color:#FCC000; display:inline-block; padding:10px; }