Fixed Annuity vs. CD: Where Should You Grow Your Retirement Money?
- Howard Shanley
- Mar 27
- 3 min read
Updated: Mar 27
April is here, and if your CD is maturing, you have a decision to make. Do you renew your CD at a low rate, or is there a better way to grow your retirement savings while keeping it safe? For many retirees and conservative investors, fixed annuities offer a stronger alternative to traditional bank CDs. They provide higher guaranteed returns, tax-deferred growth, compound interest and, income options that CDs simply can’t match.
If you're in Upstate SC and looking for a way to make smarter financial moves this CD renewal season, this guide will help you compare CDs vs. Fixed Annuities so you can make the best decision to help protect and grow your retirement money faster.
*Please watch the video below that highlights the differences.*
The Problem with CDs in Today’s Market
CDs (Certificates of Deposit) have long been a go-to option for low-risk savers. However, they come with limitations that can significantly impact your retirement strategy:
✔️ Low Interest Rates: Many CDs offer lower returns compared to annuities, making it harder to outpace inflation.
✔️ Taxable Interest: With CDs, your earnings are taxed every year, even if you don’t withdraw them.
✔️ Penalties for Early Withdrawals: Need access to your money before the term ends? Be prepared for hefty penalties.
While CDs do offer FDIC insurance, their lower returns and annual taxation could mean you're leaving money on the table.
Why Fixed Annuities Outperform CDs for Retirement Growth
Fixed annuities are designed for safe, long-term growth while offering benefits that CDs simply don’t provide:
1. Higher Guaranteed Interest Rates
While CDs may offer 3-4% rates, fixed annuities are paying 5.35%-5.65% or higher in today’s market.
A higher interest rate means significantly more growth over time.
2. Tax-Deferred Growth (Unlike CDs)
With a CD, you pay taxes on interest earned each year, even if you don’t touch it.
Fixed annuities allow your money to grow tax-deferred, meaning you won’t owe taxes until you withdraw funds in retirement—potentially keeping you in a lower tax bracket.
3. No Market Risk & 100% Principal Protection
Unlike stocks, bonds, or mutual funds, a fixed annuity provides guaranteed returns with zero market risk.
Your principal is never affected by stock market downturns—a huge advantage during uncertain times.
4. Flexible Income Options
Unlike CDs, fixed annuities can be structured to provide guaranteed lifetime income, ensuring you never run out of money in retirement.
This is perfect for those seeking financial security & peace of mind.
CD vs. Fixed Annuity: A Side-by-Side Comparison
Feature | CDs | Fixed Annuities |
Interest Rate | Lower (typically 3-4%) | Higher (5.35%+ currently) |
Tax Treatment | Interest is taxed yearly | Tax-Deferral & Compound Interest growth |
Principal Protection | FDIC insured (up to limits) | Backed by the insurance company and State Guarantee Association |
Market Risk | None | None |
Early Withdrawal Penalty | Yes | Yes, but most plans offer an annual free withdrawal Amount of either 5% or 10% |
Guaranteed Lifetime Income? | ❌ No | ✅ Yes |
By-Pass Probate in the event of death | ❌ No | ✅ Yes |
Winner? For safe money planning, fixed annuities provide higher returns, tax advantages, and retirement income security—making them a superior choice for CD holders looking to grow their money smarter.
Upstate SC: April is CD Renewal Season – Don’t Miss Out!
April is the biggest month for CD renewals, and many people in Pickens, Oconee, Anderson, and Greenville counties are rolling over their CDs without exploring better options.
If you have a maturing CD, now is the perfect time to compare your options and see if a fixed annuity is a better fit for your retirement savings.
Let’s Secure Your Retirement Dollars – Call Today!
Don’t leave your hard-earned savings in a low-interest CD when you could be earning more—tax-deferred!
Find out if a fixed annuity is right for you! Reach out to the Shanley Insurance Agency today at (864) 868-5194 or send us a message to get your free consultation. We can help you get higher rates, tax benefits, & lifetime income options. Let’s make your retirement savings work smarter, not harder!
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