Could another option fit your CD dollars?
Compare a bank CD with a fixed annuity (MYGA) and two fixed indexed annuity examples. Change the assumptions to see a year-by-year, after-tax illustration. Figures are calculated in your browser and are not sent to us.
CD replacement comparison
Enter your deposit, quoted rates and federal marginal tax rate. The model assumes a nonqualified annuity funded with after-tax money, held for the full horizon, then fully withdrawn.
Fixed indexed annuity assumptions
Results at the end of 10 years
After modeled federal income taxes
Comparison summary
Equivalent CD rates are the constant annual CD APYs that would produce the same modeled after-tax ending balance at the entered tax rate. They are not offered CD rates.
Year-by-year growth
CD values reflect annual tax on interest. Annuity values are gross until the final year; the ★ row shows each option after modeled tax.
| Year | Bank CD (after tax) | MYGA (gross / net at ★) | Simple FIA (gross / net at ★) | Bonus FIA (gross / net at ★) |
|---|---|---|---|---|
| 1 | $102,660 | $106,300 | $109,800 | $121,727 |
| 2 | $105,391 | $112,997 | $120,560 | $128,849 |
| 3 | $108,194 | $120,116 | $132,375 | $136,386 |
| 4 | $111,072 | $127,683 | $145,348 | $144,365 |
| 5 | $114,027 | $135,727 | $159,592 | $152,810 |
| 6 | $117,060 | $144,278 | $175,232 | $161,750 |
| 7 | $120,174 | $153,367 | $192,405 | $171,212 |
| 8 | $123,370 | $163,029 | $211,261 | $181,228 |
| 9 | $126,652 | $173,300 | $231,964 | $191,830 |
| 10 ★ | $130,021 | $164,006 | $217,570 | $181,919 |
At these entries, simple FIA credited interest is modeled as 9.80% each year; bonus FIA credited interest is 5.85%. Actual indexed crediting depends on the contract formula and future index performance. A historical average multiplied by a strategy rate is not a contract illustration.
If only the original $100,000 premium is tax basis, the modeled Bonus FIA after-tax result would be $178,319.
How the options differ
Bank CD. The model reinvests interest after applying the entered federal tax rate each year. CDs at FDIC-insured banks may be insured within applicable limits; check your total deposits and CD terms.
MYGA. The model compounds the entered fixed rate and applies tax to gains at the end. A real contract may have rate guarantees for a different term, surrender charges, or a market value adjustment.
Simple FIA. The model credits the assumed index return multiplied by the entered rate every year. Actual index-linked interest can be zero and depends on contract terms that may change.
Bonus FIA. The model credits a bonus at the start, then compounds the assumed index credit. A bonus may be subject to vesting and other conditions; it is not necessarily an immediately withdrawable gain.
Assumptions and limitations
This is an educational arithmetic comparison, not an offer, a quote, or a recommendation. It assumes constant rates, no interim withdrawals, no fees, no surrender charges, no market value adjustment, no state tax, and the same federal marginal rate throughout. It does not model any actual insurer, contract, index history, cap, spread, participation-rate reset, renewal CD rate, or required minimum distribution. Annuities are not FDIC-insured and guarantees depend on the issuing insurer. A CD and an annuity have different liquidity, insurance, and tax features. Review the product disclosure and your tax situation before considering a replacement.
Sources: FDIC deposit insurance · IRS Publication 575 · NAIC annuity buyer’s guide.