If you’ve walked into your local bank or credit union lately in Kalamazoo or Marshall, you’ve likely seen the “specials” on the marquee. They look fine at first glance—until you see what’s happening in the broader financial landscape.
Over the past several weeks, I’ve been receiving a flurry of updates from A-rated insurance companies. These companies are offering Fixed Rate products that, quite frankly, are making local bank rates look like yesterday’s news.
The “Main Street” Math on Fixed Rates
When we talk about “Fixed Rate” products in this context, we mean certainty. You know exactly what interest rate you will receive on every dollar you deposit for the entire duration of the term.
As you can see in the data I recently pulled from one of our top carriers, the rates are hitting levels we haven’t seen in years:
- Product
Term - 3 Years
- 5 Years
- 7 Years
- Fixed Option
(High Band) - 5.20%
- 5.75%
- 5.95%
- Index-Linked Option
(High Band) - 7.50%
- 7.75%
- 8.00%
“I wanted to pass this along because these are incredibly competitive compared to what I’m seeing at local banks. If you have money that has just been sitting in a savings account for years—money you don’t plan on touching—you are essentially leaving a ‘yield gift’ on the table for the bank. We’d rather see that interest going into your pocket.”
— Chuck Henrich
Two Things You Must Know
Before moving funds from a liquid bank account into a fixed-rate insurance product, you need to understand the trade-offs:
- The Surrender Schedule: These aren’t checking accounts. These products have a surrender schedule—a period where you’ll pay a fee if you move the money out before the product matures (in this case, 3, 5, or 7 years).
- The Index-Linked Bonus: Notice that 8.00% rate in the chart? That’s an Index-Linked Option. It offers a much higher rate, but there’s a catch: the rate is only credited if the tracked index (like the S&P 500®) is higher than it was the previous year. If the market is flat or down, you may receive 0% for that year.
Why Now?
Market experts agree that locking in these rates while they are available is a defensive win for retirees. According to Barron’s, fixed annuities have become a primary tool for “locking in yields before the Federal Reserve considers future rate pivots.” Furthermore, J.P. Morgan Asset Management recently noted that for conservative investors, “shifting from cash-heavy positions into fixed-rate vehicles can provide the stability needed to outpace inflation.”
Actionable Outcome: The “Lazy Cash” Audit
Most of our clients have “Lazy Cash”—money sitting in a big-box bank earning 0.10% or a credit union earning 2% simply because it’s convenient.
Your 3-Step Audit:
- Step 1: Look at your bank statement. What is your “Current Yield”?
- Step 2: Determine if that money is needed for emergencies in the next 12 months.
- Step 3: If it isn’t, compare that yield to the 5.95% or 8.00% rates available on the insurance side.
Let’s Put Your Cash to Work
I would be more than happy to speak with you about which of these options—the guaranteed Fixed Option or the higher-potential Index-Linked Option—makes the most sense for your goals.
Ready to see how your bank stacks up?
Call Chuck at (269) 323-7964 or schedule a 15-minute discovery call today. Let’s make sure your “Lazy Cash” starts working as hard as you did to earn it.
Sources
- “Annuity Rates Hit Multi-Year Highs,” Barron’s (March 2026).
- “2026 Capital Market Assumptions,” J.P. Morgan Asset Management.
This blog is created and authored by Chuck Henrich (Content Creator) and is published and provided for informational and entertainment purposes only. The information in the Blog constitutes the Content Creators own opinions and it should not be regarded as a description of services provided by Southwest Michigan Financial, LLC. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice.
Nothing on this Blog constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person. The Content Creator and Southwest Michigan Financial, LLC assumes no responsibility or liability for any consequences resulting directly or indirectly for any action or inaction you take based on or made in reliance of the information, services or materials provided within this blog.
