Annuities sold in financial institutions rebounded in August 2011 to the highest levels since March, according to the Kehrer-LIMRA Monthly Bank Annuity Sales Survey.

From July to August, total annuity sales leapt 22 percent to $3.6 billion. This represents a 42 percent improvement since the beginning of the year and a 24 percent improvement since August 2010. This is only the second time that annuity sales at financial institutions have topped $3.5 billion since June 2009, according to Windsor-based LIMRA.

"Total annuity sales have trended downwards since April, and this lift is an anomaly since at best, August tends to be flat for annuity sales. The last time we saw this kind of growth in August was by 18 percent back in 2007," said Janet Cappelletti, associate research director at Kehrer-LIMRA.

Bank sales of variable annuities (VAs) posted a 15 percent month-to-month increase in August. Financial institutions sold $1.9 billion in VAs, which represents a 56 growth rate from January and 35 percent over the previous August.

Variable annuity sales at banks reached $2 billion in March and have been hovering just under that level since. This apparent stagnancy belies the fact that the last time variable production reached $2 billion was in March 2008.

In August, fixed annuity sales at banks rose to $1.7 billion, rebounding 32 percent after production shrank in July. According to the Kehrer-LIMRA Bank Fixed Annuity RateWatch, the spread between the yield on five-year CDs and the average effective yield offered by fixed annuities guaranteed for five years has been under water since June. The gap between the two products peaked at 43 basis points in February and as of mid-August had bottomed out at -21 basis points.

In August, banks sales of mutual funds improved by 25 percent. At $5.4 billion, mutual fund production was at its highest level since March 2010. Mutual fund sales at banks have fallen short of $5 billion every month since October 2010.