Fixed annuities are essentially CD-like safe money vehicles issued by insurance companies. Like CDs, they pay guaranteed rates of interest, in many cases higher than bank CDs. Another advantage over CDs is their tax deferred growth.
Traditional Fixed Annuity – the carrier sets an annual interest rate that may change each year on the contract anniversary.
Multi-Year Guarantee Annuity (MYGA) – the carrier sets an interest rate that is constant and guaranteed for multiple years of the contract (ex. 3% for 5 years).
Indexed Annuity – the carrier credits interest to the contract based on the performance of an index strategy the client chooses. The client may also elect to allocate a portion, or all of the funds, to a fixed value. The indexing option allows the client to participate in a portion of the potential index gains without participating in the losses.