Without getting too technical (because there are A LOT of different types of annuities) a CD is money invested at any point in your life with the interest. Annuities are TYPICALLY a retirement vehicle. You can get fixed or variable annuities. Basically, you put a sum of money into an annuity (and they are usually high minimums, at least 10k vs as low as $500 for a CD) and the money gains interest based on whether it's fixed or variable. You can choose the term. You can also choose whether to annuitize the contract, meaning that x amount of dollars will be paid to you on a monthly, quarterly, semi-annually or annual basis, depending on the contract you go into. Many life insurance companies offer annuities while banks can offer CDs. Because the annuity is not FDIC insured, banks cannot offer it as a bank product. They offer it instead as an investment vehicle. It is backed by the insurance company who is required by law to have the money and then some set aside. You can tend to look at a fixed annuity in very similar terms to a CD to help gain an understanding of it. Many people will never annuitize a contract because they are using the benefits to pass on to their heirs. There is SO much more that goes into it, but that is the basics of it.