Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
There may be a deferring definition for CD annuities, but they're generally a guaranteed fixed rate tax deferred annuity. Of course interest rates can change, but currently a taxable bank CD five year rate is around 2% and a tax deferred fixed interest rate or CD annuity is paying around 3%.
Most people consider it to be a Fixed Annuity that has a level guaranteed interest rate over the entire surrender charge period.
Some Fixed Annuities have a guaranteed rate for part of the surrender period, and then switch to what they call a "current" rate. The "Current Rate" can vary with market conditions.
Most Annuities that are considered "cd type" Annuities, have a guaranteed rate during the surrender period. Then it switches to the current rate once there are no more surrender charges. But at this time, if the owner does not like the current rate, they are free to switch to a different product with no surrender charges/fees.
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Some Fixed Annuities have a guaranteed rate for part of the surrender period, and then switch to what they call a "current" rate. The "Current Rate" can vary with market conditions.
Most Annuities that are considered "cd type" Annuities, have a guaranteed rate during the surrender period. Then it switches to the current rate once there are no more surrender charges. But at this time, if the owner does not like the current rate, they are free to switch to a different product with no surrender charges/fees.