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What Is Fixed Annuity?

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From Quick Guide: Overview of Annuity

Summary: A fixed annuity has a fixed rate of return and is not tied into the market. Invest in fixed annuities with tips from a registered financial consultant in this free financial planning video.

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By Patrick Munro
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Patrick Munro's affinity for investing and financial matters began more than 20 years ago with business education and service throughout the ranks of the banking, insurance and...read more

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Video Transcript

"I'm financial advisor, Patrick Munro, today talking to you about fixed annuities. Fixed annuities are a great investment for folks to consider investing in, because you have the power of triple compounding. Really, you're able to put money away and it begins to compound; therefore, you're making money on your own money. Because it's in an annuity, you don't have to pay taxes on the internal rate of growth, so you get another layer of growth inside the annuity; that it's not worn down by the fact that you have to pay taxes on it. A fixed annuity is a better product than a variable annuity, which we'll talk about later in this series, because it is not tied to the ups and downs of the market. You'll always know that you've got a fixed rate of return, so hopefully, if you bought the annuity from a professional, they'll give you a better rate of return than is available for the cost of living and inflation, which is a big concern amongst savers. So fixed annuities are backed by insurance companies. You only want to work with A rated or better insurance companies for your fixed annuity, and make sure that you buy from a licensed professional that will help you make this very valuable choice in going forward for your financial future. I'm financial planner, Patrick Munro, telling you about the benefits of fixed annuities."

eHow Article: What Is Fixed Annuity?

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