What Is Fixed Annuity?

Fixed annuities allow you to lock in a rate of earning that, even over long periods of time, remains unaffected by market ups and downs. The principal investment and a specified interest rate are both guaranteed.

What is a variable annuity?

With a variable annuity, the contract value fluctuates based on the ups and downs the market may experience. This is in contrast to a fixed annuity, which provides a guaranteed interest rate, regardless of what may happen in the market.

When you purchase a variable annuity, you can choose from a selection of investments called subaccounts, which include stocks, bonds and money markets. Your financial advisor can tell you more about how subaccounts work.You can also tailor your contract to meet more of your needs by optional riders at an additional cost.

What is a fixed indexed annuity?

A fixed indexed annuity is a tax-deferred, long-term savings option that provides principal protection in a down market and opportunity for growth. It gives you more growth potential than a fixed annuity along with less risk and less potential return than a variable annuity.

Returns are based on the performance of an underlying index, such as the S&P 500® Composite Stock Price Index, a collection of 500 stocks intended to provide an opportunity for diversification and represent a broad segment of the market. While the benchmark index does follow the market, as an investor, your money is never directly exposed to the stock market.

What are the benefits?

Tax deferral

Its tax-deferred status allows you to benefit from compounded growth.

Principal and Interest Protection

It offers minimal investment-risk exposure but still the opportunity to grow money at a set interest rate. The rates are generally higher than with traditional savings vehicles.

No market risk

It offers guaranteed interest rates without exposure to market fluctuations.


If choosing to annuitize your contact for lifetime income, you have the ability to choose from different payout options: set payments for a specified period or a lifetime stream of income.

Lower investment minimums

They usually require only $1,000 to $10,000 for an initial investment.

Beneficiary protection

You can pass assets to beneficiaries and avoid costly probate. Optional riders, available for an additional cost, can enhance the amount your beneficiaries may receive.

What should you consider before purchasing?

Less Opportunity for growth

Without market participation, growth opportunity is minimal compared with variable annuities, but there’s also less risk.

Inconsistent Rates

Some rates can be offered for a fixed period and then drop after that set period of time.

Interest may not keep up with inflation

If this happens, you could lose buying power.

Before investing, understand that annuities are not insured by the FDIC, NCUSIF or any other federal government agency, and are not deposits or obligations of, guaranteed by, or insured by the depository institution where offered or any of affiliates. Annuities that involve investment risk may lose value.

Securities and Investment Advisory Services offered through Nationwide Securities, LLC., member FINRA, SPIC, and a Registered Investment Advisor. DBA Nationwide Advisory Services, LLC in AR, CA, FL, IL, NY, TX and WY. Representative of Nationwide Life Insurance Company, affiliated companies and other companies.

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