An equity linked CD is a certain type of a certificate of deposit in which the rate of return is linked to a stock index such as the S&P 500. Equity linked CD’s are issued by banks and insured by the FDIC, offering the confidence that your investment is always secure. When you compare equity linked CDs with annuities, you’ll find that the products offer a lot of the same benefits. Principal protection is one of the main benefits offered by both retirement products. They also offer low cost compared to other retirement vehicles and the chance to participate market upswings. While the equity linked CD and the annuity are different retirement options, they offer similar benefits and may be useful in combination when determining your retirement portfolio.
Annuity FYI recommends Wells Fargo’s equity linked CD. The product, Wells Fargo SGI WISE US Index, has the best benefits that Annuity FYI has seen in this type of product. The CD term is 6 years with a participation rate averaging 90%-100%. There are no spreads, caps, or fees and the minimum investment is only $1,000. The FDIC guarantees 100% of the principal amount invested. While there may be other equity linked CD products recommended by Annuity FYI in the future, at this time the Wells Fargo SGI WISE US Index is the only one believed to be best for retirement portfolios.