So I am at my bank and my banker asks me if I am interested in some fixed annuity. The reason he asks is because I have had a decent sized cash position at the bank for awhile and it just sits. I have no intention to do anything with it for awhile. Consider it a cash reserve.
At one point I cared about getting a higher % of interest on this money (like a credit union or Ally) but instead I keep it here to maintain a relationship with the private bank so assume I am not looking to get a higher interest rate and/or move to a different bank. Also let's assume the money is tied up for at least 7+ years at the bank and the bank currently pays less than .3% on a 5 year CD.
He tells me he has some "fixed annuity" that will pay about 2.8% (I don't remember the exact %) each year for 7 years. At the end of the 7 years, you get the principal back plus interest. I have the option of receiving the interest income each year or reinvesting it.
I can pull the money at any time but I lose some of the interest I accumulated. Also, the contract is insured by the state of New York (under the threshold).
I requested a print out of the information so I can read the fine print and I will get that on Tuesday.
I am also aware that interest rates are moving up (allegedly). Anyone familiar with this type of product? Any thoughts?
Submitted February 12, 2017 at 07:16AM by BusinessNeedsHelp http://ift.tt/2lxChdE
