Fixed Annuity

Fixed Annuity

A fixed annuity is designed to help you save and accumulate funds for your retirement in a safe and secure way.  A fixed annuity is an insurance contract between you and an insurance company of your choice where your chosen insurance company will make regular systematic payments to you, the annuitant, for a period that is predetermined by you at the time of purchase of the annuity. A fixed annuity usually guarantees that the insurance company will pay you on both the principal and interest on your investment. A fixed annuity is similar in some ways to a Certificate of Deposit. A fixed annuity shares the safety features of a CD, but has some major tax benefits that a CD just can't offer an investor, i.e. tax deferral.   The fixed annuity is not backed by the FDIC like the CD, but it is backed by the issuing insurance carrier.  A fixed annuity usually has a guaranteed minimum rate of interest and usually the interest rates are higher than regular bank CDs. A fixed annuity can either be a tax deferred or an immediate annuity. It depends on what type of annuity that you are looking for. Overall, a fixed annuity is a popular option for retirees who want to ensure that they have a guaranteed income stream that will supplement their other retirement options.