Banks are selling almost 3 times as many equity indexed annuities as they did a year ago, according to a report by Kenneth Kehrer Associates.[@@]

Banks sold $495 million worth of EIAs in the second quarter, compared to $181 million a year earlier, according to the Kehrer firm, Princeton, N.J.

Banks accounted for almost 7% of total EIA premiums in the quarter, up from around a 5% share in the same quarter last year.

EIAs are growing in popularity among bank customers because traditional fixed annuities are currently offering relatively low returns, while variable annuities are too risky for the typical bank client, says Alan Blank, president of Midwood Financial Inc., Naples, Fla., which sponsors Kehrer’s EIA studies.

EIAs guarantee return of principal while giving the investor a chance to earn returns based upon the performance of an equity market index, such as the S&P 500.