Safe Investments

In today’s economy, you are probably wondering where you can find a high-yield investment that is also safe. Internet searches may not provide the answers you seek.

Your searches may have yielded results such as tax lien and real estate funds claiming to offer returns as high as 12%. If you delve into the details of these offerings, you will see the investors are carrying 100% of the risk. For absolute safe investments, you must turn to the tried and true, such as certificates of deposits and government bonds. However, absolute safety does not provide high yields.

Currently, CD yields are about 3% and Treasury bill five-year yields are lower than 2%. So, the question remains, where does one invest money that will offer security in this rocky economic climate but still provide good returns? In other words, where can you find a high-yield safe investment? A fixed annuity from a highly rated insurance company may be the answer to your dilemma.

An insurance company is very similar to a bank, except insurance companies get preferential corporate tax treatment. Since insurance companies have lower corporate taxes, their rate of returns will be higher than that of commercial banks. Insurance contracts can offer safety, while providing great rates of return and tax deferral. Fixed annuities are insurance contracts.

A highly rated insurance company will have a lower leverage ratio than a bank would. This means their default risk is also lower. Deposits into fixed annuities are also backed up to $100,000 in most states. These factors make fixed annuities a safe choice. The second half of the equation is high yields. Many annuity contracts offer rates of return at 5% or higher. These returns can be tax deferred, allowing you to compound the interest over time. The Annuity vs. CD article section will compare these two products in detail.

As with any government backed note, you will want to invest with a respectable and secure financial institution. Credit ratings are a great place to start your research. Also check press releases for past performance results, particularly 2008 results. Some insurance companies are better equipped to come out ahead in this economic climate. A little research before you invest will help keep you worry-free over the long term.
Annuities are not one-size fits all products.

You need to select the annuity that best matches your investment goals, and time your purchase accordingly. Annuity Straight Talk is a valuable resource to help you make these important investment decisions. Learn all the tools to select only the best companies in The Annuity Report.

Written By

Bryan Anderson