Financial Tip of the Month: Tired of Getting Little to No Return on Your Savings Account or CD’s?
I have access to 3-5 year Multi-Year Guaranteed Annuities which on average will give you about a percent more than CDs for the same time period.
There are a few differences to consider:
- CDs are issued by banks and FDIC insured while annuities are issued by insurance companies that are safeguarded by individual state reserves.
- Another is that Multi-Year Guaranteed Annuities can be rolled over without triggering a tax-event. Using a 1035 exchange, you can transfer money from one annuity to another without showing an income. This is not possible with CDs, which generate income statements every year.
- The third difference is that you can take partial withdrawals, unlike a CD, they allow you to withdrawal up to 10% of the initial investment annually, without penalty. Liquidating even part of a CD requires you to cash it out and pay a sizable surrender charge.
So what’s best for you? If you are retired and/or over the age of 59.5, annuities will out-perform CDs because of their tax-deferral benefits and more competitive rates. If you're younger, go with CDs to avoid the 10% tax penalty in case you need to access the money.
These are just some of the interesting products that I have access to! Come talk with me and I will be glad to give you any advice I can!
Frey Financial Incorporated is located at 761 w beaver brook ave suite 4 Spooner WI 54801 and can be reached at 715-939-1300
Securities and advisory services offered through Sagepoint Financial Inc, member FINRA/SPIC. Insurance services offered through Frey Financial Incorporated, which is not affiliated with Sagepoint Financial.