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What is the difference between a fixed annuity and a variable annuity?
Author: Ammon Yorke
Website: http://www.AnnuityYes.com
Added: Sat, Jun 24, 2006 8:47:41
Category: Annuity Questions
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Fixed annuities are investments in government securities and corporate bonds. They are offered at a fixed or guaranteed rate, usually over a period of one to ten years. So when you receive payments, the monthly release of funds is set to a fixed amount and guaranteed. This type of investment is preferred by investors who value safety and stability, and by those retirees who want their money protected from the instabilities of the stock market.
A variable annuity allows you to invest in a variety of securities, like money market securities and interest accounts offering fixed rates. Stock market performance will decide the annuity’s value and your return on the money you have invested. Though there is a great risk because of unprecedented movement of stocks in the market, some still consider investing in a variable annuity because they are comfortable with fluctuations in the market and can get rid of their investment in a static position.
See also: Annuities | Securities | Bonds | Money Market About the Author:
Ammon Yorke answers frequently asked annuity questions at PrettyGreatAnswers.com.
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