Hot New Multi-Year Guarantee Annuities are a great CD alternative with a guaranteed interest rate of 2.9% for 2 years, or 3.85% for 5 years. I would like to point out that a 1-year CD is paying a mere 2.00% and a 3-year CD is paying is paying 2.55% (Source:  Now I want to talk about RISK (which many of just think of Market Risk) but there is also risk with fixed products.  The Cost of Living Adjustment (abbreviation COLA going forward) as determined by the Social Security administration is currently at 2.80%.  The other type of risk is inflation risk, better known purchasing power risk, is the risk that inflation will undermine the real value of your money made in an investment/CD.  If your CD is paying you 2.00% and COLA is 2.80%, the purchasing power (real value) of your money is declining by 80 basis points per year (.80%)… In essence, the value of your money is actually declining each year by what ever the difference is between your stated rate of return and COLA.  Call us today for more information!

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Years         AM Best Rating                 Company                                  Fixed Interest Rate

2                         B+                      Equitable Life and Casualty                    2.90%

3                         A-                       Fidelity and Guaranty                              2.70%

4                         B++                    Guaranty Income Life                              2.75%

5                         B+                      Equitable Life and Casualty                    3.80%

6                         B++                   Atlantic Coast Life                                     3.82%

7                         B++                   Atlantic Coast Life                                      3.89%

8                          B++                   Guggenheim Life and Annuity                3.20%

9                          B++                   Liberty Bankers Life                                  3.55%

10                        B++                   Atlanta Coast Life                                       4.00%