Sleeping Easier At Night During A Volatile Market


A volatile market can be scary, and everyone knows it’s currently lurking upon us. If you make wise and informed decisions, you can have a sound investment without worrying about the marketplace.

Moreover, this investment or saving keeps you protected from making anxious decisions. We review fixed annuity in detail and its key advantages compared to traditional CDs.

What Is a Fixed Annuity?

A fixed annuity is a term-based product you purchase with fixed interest rates. Therefore, you know how much you’ll receive once the contract is over. Moreover, the specific return rate gives you a sustainable income stream during retirement.

Differences Between Fixed Annuity and CDs

Traditional CDs or Certificates of Deposits issued by banks have long held a reputation of being the life savers when markets aren’t performing well. However, a fixed annuity is a much better solution to keep you afloat even when things go south worldwide.

You can rest assured with fixed annuities that you will get the promised sum. Here are some of the important differences between fixed annuities and CDs that you must know before investing in these products:

Interest Rates

The interest rates offered on fixed annuities are higher than the rates CDs banks offer. Therefore, if you invest an amount of $50K with fixed annuities, you might get around $60K in return after five years. However, the same investment might only yield $6K in profits if you buy a CD with it.


CDs are more complex than fixed annuities. You have a straightforward mechanism that works on a fixed interest rate. It also makes it possible to know what’s expected in the future.

The taxes on CDs are payable while the CD is maturing. However, with fixed annuities, you can pay the tax once you have the final amount.

Ease of Access During the Term

You can do so if you need to access and withdraw a certain amount during your fixed annuity term. With CDs, the investment is fixed, and you can’t withdraw any amount of money until the CD’s term is complete.

It’s also essential to note that fixed annuities allow only 10% or fewer withdrawals. If there are more withdrawals, there might be a surrender charge you must pay over the years.

Are Fixed Annuities Accessible?

Nowadays, buying fixed annuities is a piece of cake. Numerous companies are selling fixed annuities online. Before making such a lucrative investment, you must ensure whichever company you choose is reputable. Don’t fall victim to hoax companies in greed of high returns.

Final Thoughts

Fixed annuities can be an excellent investment in the long term. They are way better than CDs, currently running on extremely low rates compared to annuities. However, don’t invest in fixed annuities if you need your money soon. Only do so when you can keep money saved for a long time.

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