Fixed Annuity

A fixed annuity is an insurance contract designed to provide the owner with a guaranteed interest rate on their investment and predictable income payments, either for a set period or for life. The insurance company invests your contributions and credits interest at a fixed rate, which is spelled out in the contract during the accumulation phase; payments start either immediately or at a future date chosen by the owner. Fixed annuities are popular with risk-averse investors who want steady, tax-deferred growth and a dependable income stream in retirement, unaffected by market fluctuations.