Are you talking to your clients about their bank CD’s?
Below is a quick guide on how some of your older clientele could benefit from an annuity versus a CD.
|Investment Consideration||Non-qualified Guaranteed Annuity||Non-qualified CD|
|Level of Risk||Low||Low|
|Current Interest Rates||3.20% for 5 years||2.30% for 5 years*|
|Taxation||Not taxed until funds are withdrawn.
Has the advantage of triple compounding interest by:
– Earning interest on principal
|Taxed in the year the interest is earned, even if you don’t take money out|
|Guaranteed Principal||Yes, subject to the
claims paying ability of the carrier
|Yes – limited to FDIC
|Avoids Probate||Yes – the annuity is passed straight to the named beneficiary||No – goes through
|Able to take cash withdrawals
|Generally able to withdraw a portion of account value each year without a surrender charge||If you withdraw money prior to the maturity date, you may pay an interest penalty|
income with additional tax benefits
|Capable of stretching
to a beneficiary
*according to bankrate.com
As you will have noted, there are many potential benefits to an annuity versus a CD. Contact your CPS Annuity Sales Rep to obtain a client approved piece on this topic.