Fixed annuity sales plunged by a massive 23 percent in May this year, but banks aren’t tearing their hair out over the fallen numbers: It’s not that annuities have become suddenly unpopular, it’s just that they were so wildly popular to begin with.

“The 23 percent [drop] seems larger than it really is,’ said Joe Montminy, annuity research director for research company Kehrer-LIMRA.

The plunging fixed annuity sales in May don’t look so bad when you look at how dramatically they’d leapt upward in the three months prior to that. The company’s report, released this month, showed that fixed annuity sales had risen by 121 percent from December to March.

The late winter-early spring popularity of annuities is part of a seasonal cycle, said Ken Kehrer of Kehrer-LIMRA, as potential customers preparing for tax season are more inclined to buy financial products.

But this year’s sales were aided because the Federal Reserve reduced federal fund rates, Montminy said, which brought a big drop in interest rates in CDs. With CDs suddenly less appealing and equity markets still volatile, more customers were drawn to annuities.

It all combined to create a dash for annuities, he said – the months since have merely shown a drifting back toward normal levels.

In May 2008, sales were at $2.3 billion nationally; in May 2007, that number was a comparable $2.5 billion.