Gather More Assets From Bank Clients With Fixed Annuities

Gather More Assets From Bank Clients With Fixed Annuities

Clients who are weary about tying up their funds for too long have started turning to bank CDs in order to both 1) protect their assets from market downturns, and 2) ensure liquidity in the event they would like to capitalize on a financial opportunity. However, these clients should be more concerned with losing their spending power due to inflation erosion – with a competitive, 1-year bank CD being at 1.20%, according to

We have seen success moving a portion of CDs into fixed annuities to enhance yield, while still leaving excess funds in the CD to address liquidity and to provide peace of mind. By showing clients the math, we have been able to overcome that main objection of interest rate risk. See the example below – assuming a client with $100,000 and an assumed tax bracket of 30%. When comparing this CD to the 3.15% 5-year annuity, you may be surprised at what rates need to go up to in order to make the CD an attractive option:




As you can see from the yellow highlighted rate on the 1-year CD, the CD would need a renewal of 5.30% year-in and year-out just to come close (it still falls about $100 short of the annuity) to what is guaranteed for your clients today with fixed annuities.

Contact your Annuity Specialist today with your clients’ CD rates and duration – and we will provide the analysis for you, along with our top annuity quote.