Comparison of Annuities with Certificates of Deposit
Increase the yield on your bank deposits by 45%: Those in a 31% tax bracket can increase the growth on their bank deposits by as much as 45% with an American Savings Life tax-deferred annuity.
Here's how:
- If your bank account or CD earns $1,000 in annual interest income, you’ll receive a 1099 Form for $1,000 to report on your tax return. This means you’ll owe Uncle Sam $310. That $310 equals 31% of what you earned, but it equals 45% of the amount you get to keep!
- By transferring your retirement savings to an American Savings Life tax-deferred annuity, you eliminate the 1099 and get to keep that $310 in interest to compound tax-deferred. It’s like borrowing from Uncle Sam at 0%. A 1099 form is only required when you choose to withdraw funds from your annuity.
- Other key differences between Bank CD’s and Annuities are compared in the table below:
Comparison of an American Savings Life Annuity with a Certificate of Deposit (CD)
| Features |
Annuity |
CD |
| Is it free from principal/market risk and price fluctuations? |
Yes |
Yes |
| Is it a "no load" investment where there are not administrative fees charged? |
Yes |
Yes |
| Is there a minimum interest rate guaranteed for the rest of your life? |
Yes |
No |
| Are interest earnings tax-deferred? |
Yes |
No |
| Are interest earnings reinvested automatically with no current income taxation? |
Yes |
No |
| Do you avoid any increase in tax liability on social security income? |
Yes |
No |
| Does it provide penalty free withdrawals of up to 10% of the account value per year? |
Yes |
No |
| Does it pay the proceeds penalty-free to a designated beneficiary upon the death of the owner? |
Yes |
No |
| Does the investment automatically avoid the expense and delay of probate? |
Yes |
No |
| Does it offer guaranteed lifetime income with tax deferral advantages? |
Yes |
No |
| Is the deposit guaranteed by the FDIC? |
No |
Yes |
| May withdrawals be made prior to age 59- 1/2 without being subject to the 10% IRS penalty tax? |
No |
Yes |