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If you're looking for a haven for your money, with a three-year fixed-rate annuity, you can choose one paying 2.00% annually or one paying 4.25%! Other than the rate, the two products are quite similar.
If you're shopping for a five-year guarantee, available rates range from 2.60% to 4.65%, according to AnnuityAdvantage's database of annuity rates.
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Rates on annuities with the same term vary hugely. If you don't shop around, you'll almost certainly earn far less interest than you could. Unfortunately, many local annuity agents represent only a few annuity companies, sometimes just one.
Before I offer tips on how to shop around, here's some background:
A fixed-rate deferred annuity (also called a multiyear guarantee annuity, or MYGA) resembles a bank certificate of deposit. It also pays a guaranteed rate of interest for a set term. Unlike CDs, annuities are tax-deferred. Issued by insurance companies, annuities aren't federally insured like CDs, but state-mandated guaranty associations offer a level of protection.
While the rate isn't the only factor in choosing an annuity, it is the single most important thing when other factors are equal. Here are the key considerations.
How long will your money be committed?
The term is the length of the annuity guarantee period. Most multiyear annuities go from two to 10 years.
Longer-term annuities usually pay more than shorter-term ones. But today, rate differences are not large. For instance, the top three-year an
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Stocks continued their push higher Friday, with today's gains helping the major market indexes snap a three-week losing streak.
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There was nothing particularly new today to boost investor sentiment. Both the economic and earnings calendars were thin. And early afternoon speeches from Kansas City Fed President Esther George and Fed Governor Christopher Waller echoed the hawkish tone struck by central bank officials in recent weeks. It could just be that Wall Street has come to terms with the fact that the Fed will almost certainly issue a third-straight 75 basis point rate increase at its policy meeting later this month. Or perhaps investors are simply taking advantage of bargains from the late-August selloff.
Whatever the reason, today's rally was broad-based, with all 11 sectors finishing higher. Leading the pack was communication services, which jumped 2.8% on strong gains for components Meta Platforms (META, 4.4%) and Netflix (NFLX, 2.7%). Energy ( 2.5%) also outperformed as U.S. crude futures bounced 3.9% to $86.79 per barrel.
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As for the major indexes, the Nasdaq Composite's 2.1% rally to 12,112 outpaced its peers. Still, the S&P 500 Index ( 1.5% to 4,067) and the
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