Indexed Contracts Outperform CDs

Annuities with returns linked to the performance of the stock market or other investment markets have been generating returns that are about twice as high as bank certificate of deposit returns.

Researchers at Advantage Compendium Ltd., St. Louis, have published data supporting that conclusion in a report based on a review of data from 24 carriers that have been offering reset index annuities since 2003.

The researchers found that the value of assets in the annuities in the sample has increased an average of 5.4% per year over the past 5 years, compared with an average total increase of just 2.78% for the value of assets held in a series of 1-year bank certificates of deposit, the researchers conclude.