Are you looking for a safe and secure way to invest your hard-earned money in Alabama? If so, you may consider investing in a fixed annuity or a certificate of deposit (CD). These two types of investment vehicles offer different advantages, so it is essential to understand their features and benefits before deciding. This guide will provide a comprehensive guide to the best-fixed annuity and CD rates in Alabama so that you can make an informed decision.
Earn The Highest Interest Rates On Savings Today
Fixed annuities are almost identical to Certificates of Deposit (CDs) accounts and provide higher interest rates and penalty-free withdrawals for income.
| Term | Insurance Company | Interest Rate |
|---|---|---|
| N/A | UFB Bank Savings Account | 5.02% |
| N/A | UFB Bank Money Market | 5.02% |
| 12 Months | Western Alliance Bank CD | 5.01% |
| 36 Months | Oceanview Fixed Annuity | 5.00% |
| 48 Months | Americo Fixed Annuity | 5.05% |
| 5 Years | Aspida Fixed Annuity | 5.50% |
| 6 Years | American National Fixed Annuity | 5.45% |
| 10 Years | American National Fixed Annuity | 5.45% |
Disclaimer: This is a review. The Annuity Expert is not associated with a bank or credit union. However, fixed annuities are sold at most financial institutions. We aim to help you find the highest interest rates for your retirement savings. We may receive a small referral fee if you purchase something using a link in this article.
The Best Fixed Annuity Rates In Alabama
Investing in a fixed annuity is a good choice for those seeking to generate consistent income during retirement without taking on too much risk. By entering into a contract with an insurance company, you can guarantee yourself a predetermined rate of return throughout your agreement.
The Best CD Rates In Alabama
A certificate of deposit (CD) is a type of savings account that offers a guaranteed rate of return for a specified period. CDs are typically issued by banks and credit unions, offering a higher rate of return than a traditional savings account.
The main advantage of investing in a CD is the guaranteed rate of return. However, it is essential to understand that you won’t be able to access your money until the CD matures. You may incur significant penalties if you need to withdraw your funds early.
Key Differences Between Certificates Of Deposit (CD) and Multi-Year Guaranteed Annuity (MYGA)
Here are some of the key differences between Certificates of Deposit (CD) and Multi-Year Guaranteed Annuity (MYGA):
- Taxes: The interest rate on a CD is taxable income annually, whereas the interest rate on an MYGA is tax-deferred for the entire term.
- Guaranteed returns: CD and MYGA offer guaranteed returns, but the length of the guarantee can vary. The guarantee on a CD is typically limited from one month to five years, whereas the guarantee on an MYGA can extend from two years to twenty years.
- Liquidity: MYGAs are generally more liquid than CDs, meaning you can easily access your money in an emergency through penalty-free withdrawals. Like CDs, MYGAs typically have surrender charges, which means you may incur penalties if you withdraw your money before the end of the term.
- Penalty for early withdrawal: If you withdraw your money from a CD before the end of the term, you will typically incur a penalty. The penalty for early withdrawal on an MYGA can be much more severe, as it can result in significant surrender charges.
- Investment amount: A minimum investment is usually required to purchase a CD which can start at $1 to open an account, whereas MYGAs typically have minimum investment amounts starting around $5,000.
Next Steps
Alabama has several top-rated annuity and CD providers, so choosing the right one for your needs can be challenging. That’s where we come in! Our team at The Annuity Expert is dedicated to finding you the best rates for your investment. Contact us today for a free quote and see how much you could save. Thanks for reading!
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