CD vs. Annuity Rates 2025
When San Diego residents shop for safe growth, the first two options that come to mind are bank CDs and fixed annuities.
While both are guaranteed products, there are key differences in returns, flexibility, and tax treatment.
1. Interest Rate Comparison
- Bank CDs (as of late 2025): ~4.5% average annual yield
- Fixed Multi-Year Annuities (MYGAs): up to 6.0% guaranteed
That 1.5% difference might not sound like much, but on a $100,000 deposit, it’s an extra $1,500 per year in guaranteed income.
2. Liquidity and Access
Unlike CDs, most annuities allow up to 10% penalty-free withdrawals each year, giving you flexibility if you need funds early.
3. Tax Treatment
CD interest is taxed every year — even if you don’t withdraw it.
Annuity growth is tax-deferred, so you control when you pay taxes.
4. Protection and Guarantees
Both are backed by strong institutions — banks for CDs, insurance carriers for annuities.
5. Which One Fits Your Plan?
CDs can still make sense for short-term cash and very simple needs.
Fixed annuities tend to fit better when you want multi-year guarantees, tax deferral, and a clear role in your retirement plan.
If you’d like a clearer breakdown of how fixed and indexed annuities can support your savings, you can visit our fixed annuities overview.
And when you’re ready to see what might fit your situation, you can start with a few simple questions.