Fear driving people to fixed annuities

One of the worst things you can do with your money right now is lock it up in an investment while the interest rates are so low. But that's exactly what a record number of people are doing as they drive fixed annuity sales to a record-breaking $35.6 billion, the highest ever, for three months ended March 31, according to Limra, the insurance consulting firm. That's a 74 percent jump in fixed annuity sales.

Why are people doing something so dumb? Fixed annuities are offering guaranteed yields of 3.3 percent to 3.5 percent, higher than that offered by 5-year CDs -- 2.13 percent. They want something safer and want out of stocks. They're looking for the best return they can find right now.