What is a Fixed Annuity?

A fixed annuity is a fixed-income investment offered by an insurance company. They provide investors with a safe rate of return and a guarantee of principal on a tax-deferred basis.  For investors’ peace of mind, fixed annuities are backed primarily by government securities and high-grade corporate bonds. The underlying bond portfolios are managed as part of the insurance company’s general account. Investments can grow with taxes deferred until a withdrawal is made from the policy, at which point taxes are paid on the withdrawn portion.

Benefits of Fixed Annuities

  • tax-deferred annuity
  • guaranteed rate of return
  • potential withdrawal without penalty
  • lump sum or periodic payment options