Table Details
For external/non-Save accounts within the comparison table: Rate comparisons are derived from Bankrate.com for 5-year CD and Immediateannuities.com for Fixed Indexed Annuity as of May 6, 2024, and can be found here: CD, and Fixed Indexed Annuity.
5-Year CD: A 5-year certificate of deposit (CD) is a financial product offered by banks and credit unions that allows individuals to earn interest on their deposited funds over a fixed period of five years. Because of the inherent safety and generally short-term nature of a CD investment, yields on CDs tend to be lower than some other investments. CDs sold prior to maturity are subject to a mark-down and may be subject to a substantial gain or loss due to interest rate changes and other factors. Interest earned on CDs is subject to state and federal tax.
APY of 4.55% is as of May 6, 2024. Source: https://www.bankrate.com/banking/cds/cd-rates/#best-cd-rates-top-banks
Fixed Index Annuity: Fixed index annuities provide the opportunity to grow money based on positive market performance—without the risk of market loss. Although a fixed index annuity provides the potential for interest accumulation linked, in part, to an index, it does not directly invest in stocks or the index itself and does not receive dividends. Earnings will grow tax-deferred. Any withdrawals will be taxed as ordinary income. An IRS penalty may apply on pre-age 59-1/2 withdrawals. Fixed index annuities are considered complex insurance products and any guarantees are backed by the issuing insurance company.
APY of 9.5% is as of May 6, 2024. Source: https://www.immediateannuities.com/fixed-index-annuities/
A cap rate is the highest percentage gain that the insurance company will credit to your annuity in any period. For example, if your annuity has an annual cap rate of 7% and the underlying benchmark index grows by 10% that year; your annuity will be credited with a maximum of 7%. If the market only grew 4% that year, your annuity would be credited with 4%. You would receive gains up to the maximum percent limited by the cap rate. Source: https://www.immediateannuities.com/fixed-index-annuities/