Broker Check

Fixed Deferred Annuities

  • for investors seeking zero risk of principal loss from market declines
  • similar in concept to a Certificate of Deposit (CD), fixed annuities offer both guaranteed principal - no risk of market losses, and pay a guaranteed interest rate for a specified number of years.
  • after the initial interest guarantee period, interest rate may reset higher or lower than the initial rate, but will never be less than a contractual minimum guarantee
  • no annual contract or investment fees
  • surrender charges and/or market value adjustments may apply to withdrawals for a specified number of years after contract issue
  • annuity contracts usually allow a portion of the contract value (typically 5%-10%) to be withdrawn each year, without surrender charges
  • unlike CD's, annuities (even if purchased through a bank) are issued by life insurance companies, and are not guaranteed by FDIC insurance. Annuity guaranteed values are backed by the claims-paying capacity of the issuing insurer (click here for links to information about insurer safety).
  • state insurance guarantee associations may provide protection in the event that an individual insurer is unable to fully honor their contractual obligations to an annuitant (click here for more information).