A. In today's low interest rate environment, it's hard to find a good safe place with decent return. Bank saving accounts and CDs will earn you very little. Fixed Annuity could be the best alternative out there.
What is a Fixed Rate Annuity?
You can treat it just like a CD, but with a better return (see table below). Like a CD, a fixed annuity product has a minimum period of time during which there is a cost (called surrender charge) if you need to take your money out. After the surrender period, you can withdraw your money, along with interest earned.
One unique benefit of annuity is it has tax-free growth - you have to pay tax each year on the interest earned from your savings account or CD each year, but you don't have to pay tax on the interest you earn from fixed annuity each year until at the time of withdrawal.
The table shows various companies' different fixed annuity products' yields. The secret is - the longer you don't need the money, the higher the amount of money you can put in, the higher the annual yield.
Please contact us if you want to find what fixed annuity fits your situation the best.
myg-by-guarantee-years_oct_21_2015.pdf |