What is a fixed annuity?

A fixed annuity works very much like a cd at the bank. You will receive a guaranteed rate of interest for a specific time period, such as 3, 5, 7yrs or more. The main benefit of course is that the gains on the annuity account are deferred, unlike a non-qualified cd at the bank, where you pay taxes on the interest earned every year, wether or not you take out the interest as income.

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