The biggest problem with CDs and annuities is that most hold them while giving up good opportunities in bondland. I can trade my funds any day.
Vanguard 10 years estimates (https://advisors.vanguard.com/insights/article/series/market-perspectives)
If the above is correct, I prefer to be in bonds and make just 6%.
Someone in 20/80 (stocks/bonds), can have similar performance to 50/50, but with much lower volatility.

FD, I get your position. You are not a CD investor, you will never be a CD investor, and you will continue your trading approach that does not include CDs, which requires liquidity in your holdings. My original post was directed toward existing CD investors, deciding what those particular investors will do with their maturing CDs, not directed toward investors who will never hold CDs. If you want to "convert" the rest of us CD sinners, you will do it without restraint on this thread.

The biggest problem with CDs and annuities is that most hold them while giving up good opportunities in bondland. I can trade my funds any day.
Vanguard 10 years estimates (https://advisors.vanguard.com/insights/article/series/market-perspectives)
If the above is correct, I prefer to be in bonds and make just 6%.
Someone in 20/80 (stocks/bonds), can have similar performance to 50/50, but with much lower volatility.

I thought I would revisit the option of Callable CDs, what Banks are communicating about CD rates, and the merits of including them in your CD investment selections. At Schwab, major banks are offering long term callable CDs (18 month, 2 year, 3 year) of 4.4 and 4.5%, with the first callable date in July of 25. That tells me, I can get the equivalent of .3 to .4% more than a noncallable 6 month CD at Schwab. If the Bank does NOT call it in July of 25, you will continue to receive the 4.4 to 4.5% interest rate until they do call it.
For noncallable CDs at Schwab, major banks are offering 4% long term rates, so the Banks appear somewhat confident that interest rates will not drop below 4% for the next few years? I don't understand Banks offering callable CDs at these rates, if CD rates were expected to continue their rapid decline of the past year, as some posters are projecting?
So I am revisiting my position of "only" using noncallable CDs, and the risk/rewards of investing in higher rate Callable CDs, at a rate that you can only depend on for the next 6 months, but you may end up getting that higher rate for a longer period of time at the higher rate. I am taking the Feds statements that the rapid reduction of interest rates that we have seen in 2024, will likely not continue in 2025, and we may not see any interest rate declines in 2025.

An insurer can "fail" without ever being insolvent.
Never underestimate the ignorance of the investing public.

In 1991, Executive Life Insurance Company of New York (ELNY), the stressed but solvent subsidiary of its insolvent parent, Executive Life Insurance Company of California, was placed in rehabilitation in New York to protect it from cash surrenders becoming “a run on the bank.”
...
When ELNY’s parent was placed in receivership in California, the New York Insurance Department determined that an “increase in surrenders had caused a material erosion of ELNY’s assets to the detriment of policyholders with nonsurrenderable policies, primarily structured settlement annuities.” As a result, New York’s Superintendent of Insurance sought and obtained an order of rehabilitation in April 1991

https://www.pbnylaw.com/articles/THE TROUBLE WITH ELNY.pdf
It may not have been a "run", perhaps more of a fast walk, but investors spooked by problems with the parent company created a problem with ELNY that otherwise wouldn't have existed.
New York State regulates insurers more stringently than does the rest of the country. Insurers' investments can't be as risky, capital requirements are higher, and so on. This is the reason why you often see insurers operate in 49 states with a separate subsidiary in New York. Insurance companies don't want to be held to New York's higher safety standards in the rest of the country.
https://www.jstor.org/stable/253661 (Login via library/school required)
As far as the deferred annuities were concerned,

A year later, in March 1992, ... ELNY’s traditional whole life, term life and deferred annuity books of business were transferred to Metropolitan Life Insurance Company with substantially all the supporting statutory reserve assets. ... Neither the 1991 rehabilitation order or the 1992 order approving the rehabilitation plan declared ELNY to be insolvent.

@rforno : 500+ down and 100+ up for $45 - Are you talking $ concerning 500+ ,100+

500 MB / 100 MB (internet speed, not $$$)

@rforno : 500+ down and 100+ up for $45 - Are you talking $ concerning 500+ ,100+

Bond rating and insurer ratings have very different criteria. And different things happen in cases of failures.
If a company issuing bond goes under, bond investors are in line with other creditors depending on where the bond is in the capital structure. They can get something or nothing.
If an insurer goes under, its state regulator works as the lead regulator with the other state regulators to come up with a rescue/rehabilitation plan.
State regulators don't have ready reserves to pay out like the (underfunded) FDIC does for banks.
So, a failed bank may be shut on Friday and account access may resume on Monday. Forget about anything like that for failed insurers.
When my 403b plan insurance MBL-NJ went under (I think with AAA rating & 150 years of existence), all of our 403b annuity accounts were frozen. We could immediately withdraw/shift at 40% haircut (i.e receive 60c for $1), or wait for things to settle. While waiting, the frozen funds earned m-mkt rates that were about half of what MBL was paying. The money was unfrozen after 4-5 years. Technically, there was no loss, but only the lost opportunity. In my asset allocation at the time, I treated this frozen money as forced-cash.

"Any guarantees are from the insurance company, so stick with highly rated companies."
If the guarantee we are relying on is the insurance company's credit rating, why not look at their or other corporate bonds as well or do annuity products come with some other credit enhancement features that make them safer than bonds (say, unsecured bonds)?
Recently, before the recent climb in 10 yr rates, a few MFO posters bought 2-year call protected 10 yr bonds from DB (A rated) for a 5.7+% yield. They are not CDs but I thought as corporate bonds, they were good.
If I were the OP, I would also consider Agencies, in addition to Treasuries. Unfortunately, most of them are call protected only for six months or so but I will not complain a near 6% yield for a 10 yr Agency when available - none this minute. Just look out for them. I buy them at Fidelity where it is easy to find them to buy.
Edit: I saw and read msf's post after I posted the above.

Fixed rate deferred annuities, if used as savings vehicles (and not annuitized) are very much like CDs. Like CDs, and unlike funds, stocks, etc., their value cannot go down.
https://www.blueprintincome.com/fixed-annuities-cd-comparison
There is the risk of the insurer issuing the annuity going under, just as there is the risk of a bank failing. In the case of a bank failure, a government agency (FDIC) steps in, tries to get another bank to assume your bank's liabilities. If it succeeds (almost all the time), you may be forced to choose between taking you money (including interest to date) and running, or accepting a lower return for the remainder of the time on your CD.
In the case of an insurer (the issuer of your annuity) failing, it is a state government agency that steps in. As with banks, states first try to "rehabilitate" insurers - either get them back on their feet or have another insurer take over their liabilities. Should they not succeed, the insurer is liquidated.
Here's Pennsylvania's general description (not state-specific) on how that proceeds. A state-created guaranty association pays for losses not to exceed state limits. Again, similar to what the FDIC does for banks. A key difference is that state guaranty associations are typically underfunded. So it is important to stick with better rated insurers. (Rehabilitation/liquidation is to be avoided in any case.)
Pennsylvania FAQ on insurance company liquidations
Single Premium Deferred (fixed) Annuities are rather simple vehicles if one does not annuitize (i.e. one uses them like CDs). The key numbers are:
- guarantee rate,
- number of years rate is guaranteed,
- floor for annual renewal rate after that (insurer might offer more depending on market),
- penalty each year for early withdrawal (e.g. 7% in year 1, 6% in year 2);
- amount/percentage that can be withdrawn annually without penalty
There should not be a penalty for withdrawing everything once the multiyear guarantee period is past.
Something that has been added in the past decade or two is MVA - market value adjustments. Suppose interest rates have gone up since you purchased your annuity. Then, like a bond, the value of your annuity has dropped. If you close out your annuity early (effectively "putting" your policy), you are forcing the insurer to overpay (i.e. pay 100% of face value minus any early redemption charges). MVA lets the insurer adjust the payout accordingly, so that it doesn't overpay.
Conversely, if interest rates drop, your annuity is worth more than face value (plus interest). MVA adjusts the payout upward, so you "win". Many annuities but not all these days come with MVA.
https://smartasset.com/financial-advisor/market-value-adjustment
MVA seems to enable insurers to issue policies that pay a bit more. But they're shifting market risk onto you, in case you redeem early.
Here are Mass Mutual's rate sheets for its 3-5 year Stable Voyage Policies (no MVA) and for its Premier Voyage Policies (with MVA). The latter have higher rates, e.g. 4.25% or 4.35% on policies under $100K, while the Stable Voyage Policies (no MVA) pay 4.2%.
Stable Voyage rate sheet (Dec 30th)
Premier Voyage rate sheet (Dec 30th)
Important: These rates are dated Dec 30th. They are less than the rates I found quoted today. So rates on these annuities are about to drop.

Kanopy, a streaming service through many libraries across the nation, is free with limitations. I never use up the 15 or 20 movie limit per month. It isn't a suggestion to replace any of the choices mentioned above but rather to function as a decent adjunct.

I have followed this thread, but had only 2 short posts on T-Note quotes & FRN USFR.
IMO, good CD alternatives are T-Bills/Notes (noncallable). All these can be held to maturity without incurring losses. The CD & Treasuries investors are quite different from fund investors because funds have duration and they never mature, so there may be gains or losses at sale.
As for annuities, there are basic fixed-term and lifetime SPIA that have low-costs and may be fine for many. Any guarantees are from the insurance company, so stick with highly rated companies.
TIAA offers many low-cost annuities - for retirement or taxable accounts.
A big issue with annuities is that one is stuck with annuity rules - while tax-deferral is good, withdrawal penalties apply before 59.5. Taxes also apply on withdrawals.
Insurers know that & can offer attractive rates to captive clients. They also publicize those offers aggressively along with luring initial incentives.
One can do 1035 exchanges between annuities, but it isn’t a simple online process.
IMO, first exhaust all other tax-deferral options - IRAs, 401k/403b, 529, etc. When these options weren’t available, annuities were very popular.

Great stuff by @msf on annuities. I agree they are a viable option at this time. Guessing they were even more so about 6-12 months ago when rates were at/near their peaks.
That said, annuities have always been a 4-letter word to us. Too high fees, loss of control over your money, difficult if not impossible to understand terms, etc.
Not saying all of the drawbacks can't be overcome, but any prospective buyer MUST identify and understand all of the many mistakes they can (and others often do) make when buying them. Or things may not go as planned/expected.
Here's some primer links in the event anyone here is so inclined. If it's our money, I wouldn't stop with reading just these:
https://annuityguys.org/five-annuity-mistakes-you-should-avoid/
https://www.investopedia.com/articles/investing/022316/5-mistakes-avoid-when-shopping-annuities.asp
https://www.neamb.com/retirement-planning/7-common-annuity-mistakes-and-how-to-avoid-them
EDIT: Barron's does an annual review and report by annuity type that I consider the best on the planet and would absolutely use as our primary guide if ever seriously considering an annuity.
(Note: A few years ago we did consider one and passed.)
https://www.barrons.com/topics/best-annuities

Another observation. Do Fidelity, Schwab, and Vanguard have their own Dow Jones funds? No, they don't. Do they have the SP500? YES.
Years ago, back when Vanguard was providing free financial plans, my mother had them work up a plan. Several years prior, Vanguard had introduced its own index funds (working with MSCI to develop more tax efficient indexes). Yet the plan used Vanguard 500 rather than its broader based, better performing (at that time) large cap index fund.
I asked the planner why. As near as I could decipher the response, it was because Vanguard 500 was better known/more popular. Financial decisions are often made by "popular demand" and not by objective analysis.
This is not to say I think the DJIA is especially representative of "the market". Just that looking at who is offering what is not the best way to validate that.
OTOH, which market index does Fidelity display by default on its home page? Clue: it's up 200 points today and it's not the NASDAQ.

I've invested in so many cash, short term, and fixed rate vehicles that I've lost count. The ones that come to mind are: prime MMFs, government MMFs, Treasury only MMFs, national tax free MMFs, single state MMFs, ultra short bond funds, short term bond funds, short term national muni bond funds, short term single state bond funds, short term government funds, short-intermediate national muni funds, T-bills, short and intermediate CDs, liquid CDs, callable CDs, short term muni bonds, callable muni bonds, SPDAs, and GICs (stable value).
I've used some of these when the idea of losing even a single penny was an anathema to me, and I've used some when I was seeking a better multi-year return. So I appreciate different objectives, especially the concern about share prices declining. (What, you mean I could actually lose money? I've had those thoughts.)
Some people here have said that they would not use a prime MMF - too much risk for the small additional return. Actually, the risk goes further - scores of MMFs have been propped up by their sponsors over the years, including several that would otherwise have broken a buck. Regulations have changed since then; still, prime MMFs remain more risky.
https://libertystreeteconomics.newyorkfed.org/2013/10/twenty-eight-money-market-funds-that-could-have-broken-the-buck-new-data-on-losses-during-the-2008-c/
One used to see SNGVX mentioned as a safe short term fund (see, e.g. here) - it never had a losing year. That was before 2021, when it lost almost 1% followed by 2022 when it lost nearly 4.5%. So when it comes to OEF bond fund risks, your concerns are understandable.
ISTM David Sherman manages his short term funds in an unusual if not unique way, resulting in his CrossingBridge funds as well as RPHIX never having had a losing calendar year over their lifetimes. Admittedly, they are not without some volatility as your 2020 experience attests. That you pulled the trigger so quickly then also attests to the great importance you place on preservation of principal.
@stillers wrote: "4% guaranteed interest is our threshold vs bond OEFs. 5+% is pretty much nirvana." That seems to be your thinking as well: "I want to lowest risk option to produce 'at least' 4%." Further, you seem willing to make a multi-year commitment (you're considering callable CDs that if not called, will take several years to mature).
Based on that, welcome to nirvana. Another poster mentioned MYGAs, aka fixed rate SPDAs.
https://www.blueprintincome.com/fixed-annuities-cd-comparison (fixed annuities vs. CDs)
You can get a 3 year fixed annuity with an A rated insurance company yielding over 5%. Depending on your state it may even allow 10% of balance withdrawals without issuer penalty, mitigating liquidity concerns. One does need to be over 59.5 to take withdrawals without tax penalty.
If you want a policy from an AA+ rated insurer, MassMutual is paying around 4.65% for three years, depending on your state of residence. All of these policies have the added benefit of tax deferral (for taxable accounts), including the ability to "roll over" the proceeds (1035 exchange) to extend the deferral period. No loss of principal, "high" rate that cannot drop, some liquidity, and tax deferral. Seems to check all your boxes and more.

@BenWP : it's striking how dependent we've become on internet access in our daily lives. Hopefully AT&T brings their fiber to your neighborhood, as combining my mobile account along with internet and their TV offering (currently Direct TV) has saved me almost $150/month when consolidated.

@PRESSmUp: even tho we live in a metropolitan area of SE MI, our house might as well be in rural MI for connectivity purposes. The neighbors have Xfinity, but that company wanted $3500 in 2008 to connect our house. We tried a TV dish antenna for 2 years with cell phone hotspot for internet and had spotty results. The only provider serving us is ATT; the internet, TV, and landline services depend on our phone line. We are almost 3500’ from ATT’s distribution box, so we can have 2 HD channels on at the same time, but not 4 because of the distance. This matters when I might be taping a sports event and watching another one. We don’t watch many movies; Netflix on the smart TV meets our needs there. As for the price, even with modest internet speed and the second tier of TV offerings, it has risen to $335 per month. Talk about a screw job. I am an inveterate channel switcher so going from one streaming service to another in the time it takes the pitcher to deliver the next slider is an obvious impossibility. We could easily drop the landline and save a bit, granted. When I have to call ATT for billing or service problems, I follow a friend’s advice: keep saying over and over, “I want to speak to a real person.” It has worked before, although the service rep may not share my way of speaking English.

There will also be a 5-yr internal review of Fed operations that will be released formally at the 2025 Jackson Hole Fed Conference.
In a related news on Fed Stress-Tests, some banks are planning to sue the Fed over it,
https://www.cnbc.com/2024/12/24/biggest-banks-planning-to-sue-the-federal-reserve-over-annual-stress-tests.html

Another observation. Do Fidelity, Schwab, and Vanguard have their own Dow Jones funds? No, they don't.
Do they have the SP500? YES.
IYY-iShares Dow Jones U.S. ETF = the SP500
What are the biggest weighted companies in the Dow (https://www.slickcharts.com/dowjones)
GS at 8+% while it's number 46 in SPY at just 0.35%
The more you look at the Dow, the more you see how it DOES NOT reflect the US stock market. It's a dinosaur.
You can drive in the Model T or today's vehicles.

Not meaning to further hijack the thread but yesterday I just lit up a trial of a mm-Wave 5G internet service here in NoVA. 500+ down and 100+ up for $45. If after 30 days I decide to switch back to my 300/300 FIOS (roughly same price), I can just go into the building phone closet and re-connect the coax back to FIOS. But for now I'm kicking the tires with videos, downloads, uploads, and business-as-usual stuff for my internetting.
(nice plus: they have batteries on the roof to keep the signal going during power outages - on FIOS, if there's a local power outage, it goes down across the system.)

This settlement about Vanguard TDFs (or, TRFs, as VG also calls them) happened a month ago in November 2024. Issue arose from poor handling of the merger of 2 VG TDFs in 2022. VG Chester is the name VG uses for a group of its funds of funds. Those affected should have received some information.
MFO is incorrectly picking up the tag for TRF that doesn't exist anymore.
https://finance.yahoo.com/news/vanguard-pay-40-million-mutual-164815113.html