How a Fixed Annuity Works
You pay the carrier a lump sum. The carrier promises a set interest rate for a set term — often several years. Your principal does not touch the market. When the term ends, you can take the money, roll it over, or start income checks.
That promise — the rate, the principal guard — rests on the carrier's ability to pay claims. Only as strong as the company behind it. No company is failure-proof.
Who Fixed Annuities Suit
- You want calm. No market swings. No surprises.
- You have a timeline. Money you will not need for the full term.
- You like plain deals. This is the simplest annuity there is.
The Honest Trade-Offs
- Modest growth. The rate may trail inflation. Your buying power can shrink even as the balance grows.
- Locked up. Take money out early and surrender charges bite. See the surrender charges page.
- Taxes later. Gains are most often taxed as income when you take them out. General information, not tax advice.
Not a bank product. Fixed annuities are insurance contracts. The federal insurance that protects bank deposits does not apply.
Frequently Asked Questions
Is the interest rate really fixed?
For the promised term, yes. After the term, the carrier sets a new rate. Contracts also promise a minimum rate that it can never drop below.
Can I take some money out each year?
Many contracts let you take a small yearly amount with no surrender charge. More than that, and charges apply. We will read your contract's exact terms together.
What happens when the term ends?
You pick: take the money, renew for a new term at the new rate, or turn it into income checks.