During a period of stock market instability many people turn to CDs for their safety. However, the current low interest rate environment has kept CD rates low, which cuts wealth accumulation down to a snail's pace. The national average for CDs during the first month of 2016 was 1.09% APY.¹
Catholic United Financial is offering our Bonus Plus Annuity for a limited time at a 2.25% APY for the first year of the contract. While annuities are not short-term savings tools like CDs, they guarantee principal protection in a similar way but without sacrificing growth. And unlike a bank CD where interest is reportable as income each year, interest in a Bonus Plus Annuity grows tax-deferred. This can have potential tax advantages. Talk to your tax advisor to learn more.
During a five-year period, a $10,000 Catholic United Bonus Plus Annuity and an average $10,000 bank CD will perform as outlined in the charts below.
A Catholic United Bonus Plus annuity can be a competitive financial product, considering that:
- There is no stock market risk with this annuity.
- The APY is guaranteed to never drop below 1.5% for the life of the contract.
- There are no service or account fees that take a bite out of your interest earnings.
- There is a 7-year surrender period, but after the first year you can withdraw up to 10% of the current value annually without a surrender fee.²
- There is no surrender fee paid by a beneficiary of the annuity.
- The interest grows tax deferred, so there are no interest earnings to report on your tax filings until the interest is withdrawn.³
If you are saving for the long-term, a Catholic United Bonus Plus Annuity is an excellent financial tool.
Catholic United rules for our annuities are simple, straightforward and easy to understand. The application for the annuity is a simple form that can take just a few minutes to complete. You can contact your local Sales Representative to learn more.
¹Annual Percentage Yield. Current national average of 1-year CD rates was 1.09%, according to Bankrate.com on Jan. 31, 2016. ²Federal & state penalties may apply. Withdrawals prior to age 59 1/2 will be subject to government penalties. On a Bonus Plus annuity, there is a 7-year surrender period (7%, 6%, 5%, 4%, 3%, 2%, 1%). ³Catholic United Financial does not provide tax advice. See your tax preparer for advice on your situation. Minimum deposit required. Maximum issue age is 85. Form 11A-1