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  • Writer's pictureHarry N. Stout

284- Comparing a Fixed Annuity Contract to a Bank CD

A subscriber asked me to provide a comparison between a fixed deferred annuity insurance contract and a certificate of deposit (CD). While there are some similarities there are a number of differences.

Here is a comparison of the key features of the two financial products:


The key difference between an annuity contract and a certificate of deposit is that the annuity is an insurance product subject to state insurance regulation and the CD is a bank product. In today’s interest rate environment the interest rates offered on fixed annuities are usually substantially higher than bank certificates of deposit. The key for the potential purchaser is whether the annuity product meets their financial needs.


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