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Compare after tax returns of a CD and annuity.
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Educational use only. Availability & features vary by state and insurer. Guarantees are backed by the claims‑paying ability of the issuing insurance company.
Compare today’s fixed (multi‑year guaranteed) annuities with bank CDs. Both protect principal and offer a guaranteed rate, but taxation, liquidity provisions, beneficiary treatment, and long‑term accumulation potential differ. Use the quick matrix below, then run the mini calculator to see the after‑tax impact of tax deferral.
Quick answers to the top questions we hear about CDs and fixed annuities (MYGAs). For full details, see our disclosures page.
Both fixed annuities and bank CDs protect your principal when held to term. CDs are FDIC-insured up to applicable limits. Fixed annuities are backed by the issuing insurance company’s claims-paying ability and supported by state guaranty associations, where applicable and subject to limits. Review the insurer’s financial strength ratings and policy details before purchasing.
Often, yes—multi-year guaranteed annuities (MYGAs) may offer higher crediting rates than comparable-term CDs, especially at 3–10 year terms. Compare current MYGA rates here: MYGA Rates and check bank CD rates for your term to validate.
CD interest is typically taxed each year, even if you reinvest. Fixed annuity interest grows tax-deferred; you pay taxes when you withdraw interest, which can improve after-tax growth for longer horizons. Consult a tax advisor for your situation and review our disclosures page for details: Disclosures.
CDs generally charge a bank penalty for early withdrawal. Fixed annuities use a surrender charge schedule but often allow interest withdrawals or up to 10% penalty-free each year; terms vary by contract. Compare features among top issuers here: Best Fixed Annuity Companies.
It depends on time horizon, tax situation, and cash flow needs. Use our Fixed Annuity vs. CD Calculator to compare after-tax growth and income scenarios: Calculator. You can also request a personalized quote: Get a Quote.