Annuities · Comparison
Annuity vs CD (Certificate of Deposit)
Fixed annuities and CDs both offer guaranteed returns, but they differ in tax treatment, liquidity, and insurance protection. Fixed annuities offer tax-deferred growth and higher rates; CDs offer FDIC insurance and more liquidity.
Annuity vs CD — Key Differences
| Feature | Annuity | CD |
|---|---|---|
Fixed annuity: tax-deferred growth, no annual tax on interest, higher rates | ||
CD: interest taxed annually, FDIC insured up to $250,000, more liquid | ||
Fixed annuity rates in 2026: 5.00–6.25% from A-rated carriers | ||
CD rates in 2026: typically 4.00–5.50% for 1–5 year terms | ||
| Fixed annuity | 10% free withdrawal per year | CD: early withdrawal penalty |
| Fixed annuity | backed by insurance company reserves | CD: FDIC insured |
The Patriot Plans Verdict
Fixed annuities typically offer higher rates than CDs and provide tax-deferred growth. CDs offer FDIC insurance and more liquidity. For money you won't need for 3–10 years, a fixed annuity often provides better after-tax returns.
Still Not Sure Which Is Right for You?
Patriot Plans is 100% independent. We compare both options from vetted carriers and recommend the one that's right for your specific situation — no sales pressure, no commissions driving our advice.