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Annuity vs CD Calculator

Fixed Annuities vs CD Calculator

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.

After‑Tax Growth Snapshot
Important Assumptions & Disclosures
  • CD interest assumed taxable annually at the entered marginal rate (simplified).
  • Annuity interest assumed to compound tax‑deferred; tax applied to the gain at end of horizon at same marginal rate (simplified—real-world distributions may vary).
  • No early surrender charges, withdrawal penalties, RMDs, or state premium taxes modeled.
  • This is educational, not individualized tax, legal, or investment advice. Verify current rates and product features.

How to Use the Fixed Annuity vs CD Calculator

  • Step 1 — Enter your investment amount: Start with the amount you plan to allocate (for example, $50,000).
  • Step 2 — Choose your time horizon: Select the term you’re considering (e.g., 3, 5, 7, or 10 years).
  • Step 3 — Input rates: Use a market-competitive CD rate and a MYGA rate. You can pull live MYGA rates here: https://myannuitystore.com/annuities/fixed-annuity-rates/5-year/
  • Step 4 — Set tax assumptions: For CDs, enable annual taxation; for MYGAs, use tax-deferred compounding. If unsure, leave defaults and consult a tax professional.
  • Step 5 — Choose cash flow preference: Select “reinvest” for growth or “interest-out” to see potential annual income.
  • Step 6 — Compare results: Review total interest, after-tax values, and year-by-year growth. Use the Journey Guide tool for a broader retirement view: https://myannuitystore.com/journey-guide-retirement-planning-calculator/
  • Step 7 — Next steps: Request a personalized quote to compare current offers: https://myannuitystore.com/annuity-quote-request/

Fixed Annuity vs. CD: Frequently Asked Questions

Quick answers to the top questions we hear about CDs and fixed annuities (MYGAs). For full details, see our disclosures page.

Q Are fixed annuities safer than CDs?

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.

Q Do fixed annuities usually have higher rates than CDs?

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.

Q How are fixed annuities taxed vs. CDs?

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.

Q What about liquidity and penalties?

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.

Q Which is better for me—CD or fixed annuity?

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.

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