Host : Colin MacDonald
Category : Basics of Annuities
Date : 05 October, 2019
Topic : Annuities vs CD's
Length : 18 Mins
Tags : annuities, CD's, Safety
This is a replay of a webinar hosted by All Things Annuity President, Colin MacDonald. The topic for this webinar was Annuities vs Bank CDs. Colin covers the basic featues of annuities, the differences between a CD and an annuity, current rates, as well as the benefits of tax deffered status.
Annuities are typically offered by insurance companies and sold as financial products. Generally a client would give the insurance company a lump sum of money or annuity premium which would then be invested by the insurance company. The insurance company in return guarantees the client either a fixed rate of return for a set period of time which would then be available to the client upon the maturity of the contract, or guarantees a steady flow of income for either a set period of time or for the lifetime of the contract holder.
CD’s are considered to be a type of financial arrangement between the CD holder and a financial institute, often times they are offered through a bank. The holder of the CD deposits a sum of money with the financial institute at which point the money will grow at a predetermined interest rate for the duration of the contract. At the end of the CD’s contract the client can then withdraw their original principal plus the prearranged interest that was earned during the life of the contract.