Rising Rates are Good For Savers
As I write, it seems like everything is going up, gas prices, homes, everything. But for conservative savers, that’s not all bad news. For the first time in years conservative investments are seeing rates rise.
For those looking for safe, guaranteed returns in an uncertain stock market, the go to was CD’s. Unfortunately, even with rates rising, according to Bankrate’s monthly survey, the average 1 year CD is paying 0.27%, and for 5 years the rate is an abysmal 0.48%
For American’s looking for a safe, simple, vanilla way to invest and earn interest, these are just not a good option. Low rates are pushing more Americans into riskier investments, like high yield bonds, or the stock market. But for retirees, that extra risk may not be a good idea.
What are savers supposed to do? There are investments similar to CDs that many of our clients have been choosing. Multi Year Guarantee Annuities (MYGAs).
MYGAs come with guarantees like:
Guaranteed protection of your investment
Guaranteed fixed rate of return
Guaranteed length (1 Year, 2 Years, 5 Years, etc)
Certificates of Deposit are issued by banks, while Multi Year Guarantee Annuities are issued by insurance companies. Many require a minimum investment. Some have age restrictions, like the applicant must be under age 90. This varies depending on which MYGA you choose. We recommend understanding the differences between MYGAs and CDs before investing.
The main reason our clients are choosing MYGAs is interest. MYGAs are currently available that offer 5 to 10 times higher interest rates than what CDs are paying. For those looking for safe, vanilla, guaranteed investments, MYGAs may be a good fit.
Top MYGA Interest Rates
1 Year Guarantee - 1.00%
2 Year Guarantee - 2.95%
3 Year Guarantee - 3.60%
4 Year Guarantee - 3.75%
5 Year Guarantee - 4.05%
Rates current as of 6-7-2022. Rates may vary by state, age, and investment amount. Investment minimums apply. All policies allow for full withdrawal of principal and interest at maturity.
Contact us for more information and to see if a MYGA might be the right investment for you.
