Annuity vs. CD: Which Fits Your Financial Plan? Compare growth, guarantees, access, and taxes before choosing where your money belongs.

Annuities and certificates of deposit can both appeal to people seeking predictable growth, but they are not interchangeable. CDs are bank deposits generally covered by FDIC insurance within applicable limits, while annuities are insurance contracts backed by the issuing insurer’s claims-paying ability. The key differences include access to funds, early-withdrawal or surrender charges, tax treatment, fees, guarantees, and potential income benefits. Before choosing, compare the specific contract terms, understand how withdrawals are taxed, and consider your time horizon and need for liquidity. A qualified financial professional can help you evaluate the options in the context of your broader plan.