At one time, certificates of deposit (CDs) were a reliable high-yield savings vehicle. But after the Federal Reserve (the Fed) cut interest rates four times since July 2019, CD rates hover around just 2.00%. And there’s no indication the Fed will raise rates anytime soon.

So if you’re considering opening or renewing a CD, what other options do you have for a safe and certain investment?

For folks who not only want their investments to do well but also have their money do good, one alternative is a charitable gift annuity (CGA).


How Do CGAs Work?

A CGA is a contract between you and a charity. You make an irrevocable gift of cash or securities to the charity, and in return, the charity makes regular fixed payments to you for the rest of your life. The rate is based on the size of the gift, your age, and when you want to begin receiving payments.

The older you are — or the later in life you start taking the income — the higher the annuity rate. For example, a 65 year-old could see an annual rate of 4.70%, while a 75 year-old may get 5.80%.

Upon your death, the charity receives the remaining balance of the gift. Here at the Catholic Community Foundation (CCF), that balance goes into an endowment fund — ensuring your generosity does good in our community forever.

Certificate of Deposit (CD)

Charitable Gift Annuity (CGA)

65 year-old
$10,000 CD
2.25% interest rate

65 year-old
$10,000 CGA
4.70% annuity rate
~$3,363 charitable deduction

5 years later...

5 years later...

$1,125 earned (without compounding)

$2,350 received in payments (without a change to the principal)
~$1,653 (70%) of payments would be tax-free income

Upon death...

Upon death...

The value is distributed to the named beneficiary.

Remainder is added to an endowment fund to support the Minnesota Catholic community in perpetuity.


Your Giving Yields More than Income

Besides receiving income, you’ll see tax benefits from your gift. At the time of your gift, you’ll receive a partial charitable deduction. And, for a period of time — variable upon your age — a portion of your income will be tax free.

Plus, you can feel at peace knowing your gift will provide your favorite charity or cause with perpetual support.


The information provided above by the Catholic Community Foundation of Minnesota (CCF) is general and educational in nature. CCF and its staff do not provide individualized legal or tax advice. We recommend you consult with your attorney or tax professional regarding your unique personal situation.

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