Rhode Island residents are constantly looking for the best investment options to grow their wealth and secure their future. Two of the most popular options for fixed-income investments are fixed annuities and CDs (Certificates of Deposit). But how do you determine which one is the best fit for you? This guide will compare the best-fixed annuity rates in Rhode Island with the best CD rates to help you 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.
Best CD Rates In Rhode Island
A CD (Certificate of Deposit) is a low-risk, FDIC-insured savings product banks and credit unions offer. You deposit for a specified period, typically three months to 5 years, and the bank promises to pay you a fixed interest rate. CDs are often marketed as a safe, short-term investment option.
Advantages of CDs
- Guaranteed return: CDs offer a guaranteed return, which can help you plan your expenses and ensure that you have a steady source of income.
- FDIC insurance: CDs are insured by the FDIC, meaning your deposit is protected up to $250,000 per depositor, per institution.
- Predictable returns: CDs offer predictable returns, which makes it easy to plan your budget and expenses.
Disadvantages of CDs
- Low returns: CDs offer relatively low returns compared to other investment options.
- Penalty for early withdrawal: If you withdraw money from a CD before it matures, you may be subject to an early withdrawal penalty.
- Limited liquidity: Once you deposit money into a CD, you cannot access it until it matures.
Best Fixed Annuity Rates In Rhode Island
A fixed annuity is a contract between you and an insurance company. You make a lump sum payment or a series of payments, and in return, the insurance company promises to pay you a guaranteed income for a specified period or the rest of your life. Fixed annuities are often marketed as low-risk, long-term investment options for retirement.
Advantages of Fixed Annuities
- Guaranteed Interest Rate: Fixed annuities offer a guaranteed rate of return.
- Guaranteed income: Fixed annuities provide a guaranteed income stream (optional), which can help you plan your expenses and ensure that you have a steady source of income in retirement.
- Tax-deferred growth: The investment grows tax-deferred, which means you don’t pay taxes on the interest earned until you start receiving payments.
- Estate planning: In some cases, the remaining value of a fixed annuity can be passed on to your beneficiaries after you pass away.
Disadvantages of Fixed Annuities
- Limited liquidity: Most fixed annuities offer limited withdrawals annually without a penalty. Any money outside those limitations may come with a surrender charge.
- Early withdrawal penalties: If you withdraw money from the annuity before you reach the age of 59 ½, you may be subject to a 10% early withdrawal penalty.
Next Steps
We have covered a great deal of information in this comparison about fixed annuities and CDs available in Rhode Island, so you should know what is necessary to make an informed decision about what is best for your unique situation. Fixed annuities and CDs can be effective when creating your ideal investment portfolio; however, you should weigh out all of the considerations like tax treatment, liquidity, return potential, and rate of return before choosing either option.
Keep in mind that it’s okay to take some time and research before making any decisions because, ultimately, you are investing in something that will be part of your long-term financial plan. A little bit of effort during the research phase can genuinely go a long way later on! If your goal is to get the best-fixed annuity or CD rates in Rhode Island, look no further than our team. We stand ready and would love to help answer any questions that you may have and provide you with a quote for coverage. Contact us today so we can get the ball rolling!
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Disclaimer: I may receive a small referral fee if you purchase something using a link in this guide.