Hello, I like CD-type fixed annuities (not for retirement this time) and just received an offer below. Would anyone be so kind as to give an opinion to help me out? I have about $100,000 savings I set aside to invest on this annuity...It's from an ins. co. with an A. M. Best, A+, the agency said, but I couldn't verify it:

$100,000 or more - 5.31% guaranteed 9 yrs (5.34% guaranteed 7 years)
Less than $100,000 - 5.01% guaranteed 9 yrs (5.04% guaranteed 7 years)

Term: 7 years (walk away, no annuitization required). The interest rate is fixed and guaranteed for 9 years, but the early surrender charges only last for seven. Complete account liquidity after only 7 years. No surrender charges if not withdrawn before maturity. No charges to transfer entire account on maturity to another institution, as well as no other charges whatsoever.

I only hesitate because:

(1) I prefer 4 or 5 years. I know rates are going down, still will it make good financial sense for me to take all 7 yrs at the low 5.34% rate?

(2) And would it make better sense to invest less than $100K, at 5.01% disregarding the 3 points difference in the hopes of getting a better rate with the rest of my $100K? Or should I invest the whole $100K at 5.34%?

(3) I'm puzzled that for 7 yrs they increase the rate while for 9 yrs they decrease it... Usually it's the reverse... Is there a hidden factor I'm missing?

Thanks ever so much for any opinions. Rosedal

P.S. Don't know whether I'm allowed to mention the agency and the ins. co. here, but if anyone is interested I'll send them to you.

I think I know the answer...But let me make sure before telling you. I would imagine that you are allowed to mention them.

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New graduate with an emphasis in debt counseling.

The 7-year rate is no deal. Check out Fixed Annuities - Compare Fixed Annuity Rates

TheStandard has an annuity paying over that rate with a 5 or 6 year annuity.

We do a lot of business with Protective Life and ING, and their fixed annuities are very good. We've met people that have had horrible experiences with Great American and Midland that we've had to clean up...

Also, keep in mind that annuities are tax-deferred vehicles, and the IRS will impose a 10% penalty on any withdrawals prior to age 59 1/2. If Non-Qualified, principal withdrawn will be excluded. Also, 1035 exchanges will have no penalty.

Hello and thanks so much Mynion for your good suggestions! I'm sorry I didn't receive notification of your response, but I made sure now to click on it.

I don't like the "surrender periods" indicated on the chart you so kindly sent me, so I prefer the CD type annuities where on maturity, you can withdraw ALL without strings attached.

I'm eager to "liberate" my municipal money market which pays only 1.5%, so I was considering the following annuities I found in the chart and wonder if I'd be doing the right thing?:

5 Years: 5.25% Midland Natl $10K - (only to 7-1-08) OR:
9 Years: 5.61% Jackson Natl Life $100K - (only to 7-7-08) (I had an annuity with them in the past, so I feel confident). LOL!

Too bad Midland is no good since with the 5-year and $10K I could still search for a higher rate with the remaining money, but with the 9 year and $100K I won't have any left if rates go up...

I'm not planning to withdraw before maturity. If "Non-Qualified" means non-IRA, then this money is Non-Qualified. As to the 1035, will I be able to transfer directly from my municipal money market to the annuity, as I did with my IRAs (trustee to trustee) in order not to pay taxes, since one is all tax free and the other deferred?

I hope you don't mind my imposing on you once more for your valued opinion, and thank you very much again! Rosedal

P.S. I had to remove the link in your quote per a popup message...