A fixed annuity is a deferred annuity or tax deferred annuity. It works similarly to a certificate of deposit (CD) that you could get at a bank. There are however key distinctions that need to be addressed. Here you may get a set rate of return for the deferral perios. You may get a higher rate the first year and lower rates in following years. Fixed annuities have one major advantage over CD’s – tax deferred growth. NOTE: This DOES offer protection or guarantee of the principal.
