No. of Recommendations: 3
This product sounds remarkably like an index annuity. Here is a thread about them from the annuities board--

1. Read the contract carefully before you sign. Your funds may actually be with an annuity company. You can have high surrender fees.

2. Caps (or partial participation rates) often mean you get less than the full gain from the underlying index.

3. The guaranteed return can depend on annuitizing the contract, but many don't do that because they would rather assets went to their heirs.

4. Many are dissatisfied with the less-than-promised return actually received but surrender fees make it difficult to do anything else.

My aunt had her bank sell her an annuity with "guaranteed yield" when one of her CDs matured and she was unhappy with the lower CD interest rate offered. It turned out the guarantee was only for a few years, after which the yield fell by half. But she was stuck leaving her money there because of the surrender fees.

It was a bad investment, sold by a reputable bank.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.