The honest comparison

Secondary market annuities vs. CDs, Treasuries, and new annuities

Secondary market annuities carry an estimated yield of roughly 4 to 7 percent because you give up two things conventional fixed income keeps: liquidity and government or guaranty backing. That is the whole trade, stated plainly. The table below shows exactly where each instrument stands so you can decide which sleeve of your money belongs where.

Where each stands today

National avg 1-yr CD

1.99%

Top CDs run higher, ~4–5%

5-yr U.S. Treasury

4.23%

Risk-free, fully liquid

10-yr U.S. Treasury

4.49%

Risk-free, fully liquid

IG corporate bonds

5.20%

Corporate credit, liquid

Secondary market

4–7%

Limited liquidity

CD rate: FRED / Bankrate national average, as of July 1, 2026. Treasury: U.S. Treasury, as of July 2, 2026. National-average CDs understate top nationally-available rates.

Side by side

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	Secondary market annuity	New annuity (SPIA)	Bank CD	U.S. Treasury
Typical yield	4–7% effective annual	Lower for the same schedule; retail pricing	Tracks prevailing bank rates; lower	Tracks prevailing market rates; lower
What you own	Court-assigned payment rights (or an assigned annuity contract)	An insurance annuity contract	A bank deposit	A U.S. government bond
Who backs the payments	The issuing insurance carrier or state lottery	The issuing insurance carrier	The bank, plus FDIC insurance	The full faith and credit of the U.S.
Government or guaranty protection	Generally none for payment rights	State guaranty association coverage, within limits	FDIC insured up to $250,000 per depositor, per bank	Direct federal obligation
Liquidity before maturity	Limited; no public market. Resale or reassignment possible with our help, not guaranteed	Generally irrevocable once payments begin	Early withdrawal allowed with penalty	Liquid; sold on public markets any business day
How the schedule is set	You step into an existing court-ordered schedule	You design the payout with the insurer	Fixed term you choose, typically 3 months to 5 years	Fixed maturities up to 30 years

CD and Treasury yields move with the market. Compare live quotes from your bank or broker against the listing-level yields on our inventory before deciding.

What this means for investors: A secondary market annuity can pay a higher estimated yield than a CD, Treasury, or new annuity, but you earn that extra yield by giving up two real things: government or guaranty backing, and liquidity. These payment rights are less liquid than a CD or a Treasury, not more. There is no public market for them; resale or reassignment to another buyer may be possible with our assistance, but it is not guaranteed, and its price moves with prevailing interest rates. Keep money you may need soon in a CD or Treasury, and consider a payment stream only for money you can commit for the long term.

Where the extra yield comes from

The premium over Treasuries has a name in fixed income: a limited-liquidity premium. A payment stream cannot be sold on an exchange, and while resale or reassignment may be possible with our assistance, it is not guaranteed, so the market prices it at a deeper discount, and the investor who can hold it collects the difference. There is no free lunch in the spread. There is a real trade that favors patient money.

The premium over a new annuity is simpler. It is the difference between secondary-market and retail pricing. The original settlement recipient accepted a discount for immediate cash, the court approved the transfer, and that discount reaches you instead of an insurer's new-business pricing. Same carrier, same checks, better entry price. We explain what you legally own, and what you do not, in our guide to whether a secondary market annuity is actually an annuity.

For the wider menu beyond these four, including bond ladders and dividend portfolios, see our survey of annuity alternatives. In practice, we see investors treat these as complements rather than rivals. CDs and Treasuries hold the money you may need. Payment streams hold the money you will not touch for years, at yields you can check any time on our current rates page. That split has served our investors well since 2011.

Comparison questions we hear most

Annuity vs. CD: which pays more?

A fixed annuity usually pays a little more than a comparable CD and grows tax-deferred, while a CD stays liquid and is FDIC-insured up to the limit. So the annuity wins on yield and taxes, the CD wins on safety and access. If your goal is the highest fixed yield and you can lock the money up, a secondary-market payment stream typically pays more than either, in exchange for giving up liquidity and guaranty coverage.

Why do secondary market annuities yield more than CDs and Treasuries?

The yield premium is payment for limited liquidity and for the absence of federal or guaranty backing. You buy an existing payment schedule at a discount to its face value, you plan to hold it for the long term, and you rely on the carrier or state lottery behind it. There is no daily market, though resale or reassignment may be possible with our assistance at a price that is not guaranteed. Investors who can commit the money for the long term collect the spread. Investors who might need the cash early should hold the liquid instruments instead.

Are secondary market annuities safer than CDs?

No, and we will not tell you otherwise. A CD under the FDIC limit is federally insured, and nothing in this market matches that. The honest comparison is between the strength of a top-rated carrier or a state lottery obligation and the extra 2 to 3 points of yield. Many of our investors hold both, using CDs for near-term liquidity and payment streams for the long-dated, higher-yielding sleeve.

Should I buy a new annuity or a secondary market annuity?

It depends on what you need. A new single premium immediate annuity lets you design the exact schedule you want, backed by a contract with guaranty association coverage. A secondary market stream makes you take a schedule that already exists, and pays you a meaningfully higher yield for that inflexibility. If an existing schedule happens to fit your timeline, the secondary market is usually the better price for the same carrier's checks.

Can I hold all of these in a retirement account?

CDs, Treasuries, and annuities fit standard retirement accounts. Payment streams need a self-directed IRA with a custodian that accepts alternative assets, which is a well-worn path our team handles regularly. Call us at (800) 449-6311 if you want to know which custodians we have closed with.

What these assets are, and what they are not

Guaranteed and life-contingent structured settlement payment rights, and lottery payment rights, represent the right to receive factored payments that Pacific Structured Assets purchases and assigns to investors through a court-approved process. They are purchased at a discount to their total scheduled payments.

These payment rights are NOT annuities, NOT insurance products, and NOT securities registered with the U.S. Securities and Exchange Commission. They are not bank deposits, are not FDIC-insured, and are not protected by any state insurance guaranty association. The industry term “secondary market annuity” refers to these payment rights and does not mean you are purchasing an insurance annuity contract.

You acquire the right to receive the payments, not the underlying annuity. The annuity itself does not change hands. Unlike the original structured settlement annuity, which may be shielded from creditors under applicable law, the assigned payment rights you purchase generally do not carry that creditor or bankruptcy protection.

Assigned annuities, offered as a separate product line, are existing insurance annuity contracts reassigned to a new owner through a change of ownership or an irrevocable change of payee.

These are long-term holdings with limited liquidity, and may not be suitable for every investor. There is no public trading market and no daily price. Resale or reassignment of a payment stream to another buyer may be possible, and Pacific Structured Assets can assist, but a resale is not guaranteed and the price it would bring is not guaranteed. Because the payments are fixed, that resale value moves with prevailing interest rates: an investor could realize a gain if rates have fallen since purchase, or a loss if rates have risen. These holdings are best suited to capital an investor can commit for the long term. Nothing on this website is tax, legal, financial, or investment advice. Consult your own advisors before investing.

Pacific Structured Assets, Inc. does not provide tax, legal, financial or accounting advice. The material on this website has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial or accounting advisors before engaging in any transaction, including the acquisition of factored structured settlement payments. Pacific Structured Assets is not registered with the Securities and Exchange Commission and is not licensed to sell insurance in any state.

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