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People buy annuities for the guaranteed income. That's an existing product people want. Annuities get ~5% interest, and when you die you usually forfeit the pri
by vineyardmike 3y ago
People buy annuities for the guaranteed income. That's an existing product people want. Annuities get ~5% interest, and when you die you usually forfeit the principal. It's also not FDIC insured.
This CD is 4.75%, FDIC insured, and you get the principal back. It's superior to an annuity for a good chunk of people. Sure the principal degrades in post-inflation buying power (excluding the interest payments), but that's not the point because it's competing with $0.
- alexpotato 3y ago> but that's not the point because it's competing with $0. If the option is "Buy the CD or do nothing" though, correct?
- snypher 3y agoI believe it's [buy this CD, buy an annuity]
- soligern 3y agoCan you withdraw the interest penalty free before the term is up?
- vineyardmike 3y agoThe interest can either add to the principal or be a regular distribution.