Fixed Annuity vs Bank CD (Which Fits Your Retirement Dollars?)
Both protect principal, but a multi-year guaranteed annuity (MYGA) can offer tax deferral and often higher credited rates for longer terms. Here’s a side‑by‑side so clients (and nosy in-laws) get it fast.
Fixed (MYGA) Annuity
- Rate Range (Current Market): 5.15% – 6.10% (multi-year)
- Tax Treatment: Tax-deferred until withdrawal
- Access: Typically 10% free withdrawal annually
- Guarantees: Backed by insurer; state guaranty association coverage (limits apply)
- Use Case: Pre‑retirees wanting predictable accumulation
Pros
- Often higher net growth vs CDs (after tax deferral)
- Flexible payout options later (income potential)
- No annual 1099 while funds stay inside
Cons
- Surrender charges if exiting early
- Taxed as ordinary income on gain when withdrawn
- Not FDIC insured (but has state guaranty backstop)
Jason Caudill, MBA
Jason Caudill is President of My Annuity Store, Inc. who's mission is to make buying an annuity easy and enjoyable. He has distributed more than $1 Billion of annuities during his 20 year career. Jason's work has been cited in Investopedia, Yahoo Finance, Think Advisor, MarketWatch, PocketSense, Due, Wikipedia, and Benzinga.
Latest Posts
Sign Up for Weekly Annuity Rate Updates
Instantly receive the “Income Savvy Workbook: turning assets into income.”
As Seen On:
Our Clients Reviews