Looking for an Alternative to CDs?

With interest rates changing over the past year, many people have been asking about alternatives to traditional savings accounts and CDs.

One option that's worth considering is a Multi-Year Guaranteed Annuity (MYGA).

Think of it as an insurance company's version of a CD. Like a CD, your interest rate is guaranteed for a set period of time. However, there are a few key differences that may make it worth considering.

One of the advantages of working with an independent financial advisor is access to a broad marketplace of insurance companies and guarantee periods. Rather than being limited to a single provider, an independent advisor can compare products across multiple carriers to help identify competitive rates, contract features, and guarantee periods that align with an individual's financial goals and liquidity needs.

How does a MYGA differ from a traditional CD?

• Tax-deferred growth. Interest compounds without generating a taxable 1099 each year. Taxes are generally deferred until money is withdrawn.

• Guaranteed principal and interest. Your principal is protected, and your rate is locked in for the entire guarantee period.

• Liquidity. Most contracts allow penalty-free withdrawals of up to 10% annually, and many include additional provisions for certain health-related situations after the first contract year.

• Competitive guaranteed rates. Depending on market conditions, MYGAs can sometimes offer rates that are comparable to—or even higher than—traditional CDs while also providing tax-deferred growth.

  
  

Like any financial tool, a MYGA isn't the right fit for everyone. If you'll need all of your money in the near future, a money market or savings account may be the better choice. In many cases, a balanced approach—keeping a portion of your assets readily available while placing another portion into a guaranteed option—can provide both flexibility and growth potential.