The annuity scheme is an agreement between an insurance company and an individual. Once you sign up for this scheme, you have to make payments, either as a lump sum or through monthly installments, for a certain number of years. In exchange, you will receive a specific sum every year, every month or throughout your life. Depending on the type of scheme you have enrolled, the annuities rates will vary. In comparison to the various annuity schemes available, in fixed annuity, the insurance companies guarantee that you will be offered a minimum rate of interest.
Since the plan of fixed annuity has the reputation for being safe and sound investment, it is the most sought-after by individuals. The convenience and the guarantee of an established payment makes this scheme very popular among retirees as well. The annuities rates of such schemes are ideal for those who want to earn a stable income in their post-retirement stage. But, before you sign up for this scheme, it is best if you have some information about it. Fixed annuities can be either deferred or immediate. In deferred annuity, the rate of interest is accumulated regularly and payments start many years later. In immediate annuity, the insurance companies provide fixed payments depending on the size of the annuity and your retirement age.
Majority of the investors opt for fixed annuities rates, because they consider them to be the safest. Since, a fixed annuity pays guaranteed rate of interest, it is most suitable for investors who are uncomfortable with the stock's market unpredictable state. Apart from this, it not only offers low investment minimums but is also tax free until the individual begins to receive periodic payments from the insurance company. Thus, before you apply for this scheme, it is best if you first gather all the annuity rates offered by the different companies. This is because the rates which they offer vary from one to the other. Once you have gathered all the information, choose the insurance company whose annuity rates will be most suitable for you.