"Hey Joe, I'm thinking about buying a CD. What do you think about a CD versus an ANNUITY?"

Well, it's a loaded question, right?

But I like CDs for some people in money markets.

However, you’ve got to understand that a CD and an Annuity do different things.

A Multi-year Guaranteed Annuity basically says that we're going to guarantee you an interest rate, just like a CD at a bank, for a certain amount of time.

But it's only issued through an insurance carrier instead of a bank.

With a Multi-year Guaranteed Annuity, you're going to pick:

One year, two years, three years, four years, five years, however many years you want.

And you'll get that interest rate just like if you bought a CD at a bank.

So if you bought a CD at a bank, and they say, "Hey, our two-year fixed rate is 4%".

Our three-year fixed rate with an Annuity might be 5%.

When you buy a CD at a bank, the bank is guaranteeing the money.

But when you buy a Multi-year Guaranteed Annuity, the insurance company is guaranteeing the money.

A lot of people have been moving their money out of banks into insurance.

Because they're worried about SAFETY.

And rightfully so, you don't want to have all of your money in the bank. 

It's probably not a good bet to keep more than $250,000 in a bank that you wouldn't be covered for.

Hence, this is where Tax-deferred Annuities come in.

Here's the good part, it's called triple compounding.

You earn interest on your principal.

You earn interest on your interest.

You earn interest on the money you would have paid taxes on because it's tax deferred.

Now, it's like a TRIFECTA.

*Blog Disclosure: It's not the purpose of this blog post to provide tax, legal and/or financial advice and you should always seek counsel from your CPA, attorney, and/or advisors as these topics relate to your specific needs. This information is being presented in a very general way and it's for illustrative purposes only.