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annuity contracts usually allow a portion of the contract value (typically 5%-10%) to be withdrawn each year, without surrender charges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).