As interest rates have fallen, so have fixed-annuity sales through banks.

In mid-December, according to Kehrer Annuity Rate Watch, the average interest rate on annuities sold through banks-the largest channel for fixed-annuity sales-fell to 5.1%. That made the annuities less attractive than one-year CDs, which according to Bank Rate Monitor averaged 5.18%.

Historically, bank sales of fixed annuities have done well when the products paid more than 100 basis points more than one-year CDs, and suffered when the advantage fell toward 50 points.

In 1994, when fixed annuities were paying more than 200 basis points above one-year CDs, banks saw their best fixed-annuity sales ever.

Fixed-annuity sales amounted to $2 billion in the fourth quarter of 1997, down from $2.5 billion in the third quarter and $3.1 billion in the second, said Kenneth Kehrer, whose consulting firm tracks fixed-annuity rates.

Last year, for the first time, sales of variable annuities at banks surpassed those of fixed annuities, as investors accepted more risk in exchange for better returns.

At First Busey Securities, the broker dealer of Busey Bank in Urbana, Ill., fixed-annuity sales are rare indeed.

"We haven't written a fixed-rate annuity here in three years," said Curt Anderson, president of First Busey Securities.

It is no surprise that banks across the nation are seeing decreased demand, he said: "I would see where they would be hurting big time."

Customers seeking secure investments are turning toward products like municipal bonds, high-quality corporate bonds, and treasury bills, Mr. Anderson said.

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