A fixed annuity is an insurance contract that credits a declared interest rate on premiums, compounds tax-deferred,and can be annuitized or withdrawn under contract terms. The insurer invests premiums in its general account and bears market risk, offering a minimum guaranteed rate and an annual or multi-year declared rate. Fixed annuities appeal to conservative savers seeking predictable accumulation and optional lifetime income. Surrender charges apply for early withdrawals, and interest is taxed as ordinary income when distributed. Riders may add features such as enhanced death benefits or guaranteed lifetime withdrawal benefits, subject to extra fees and restrictions.

In planning, fixed annuities anchor conservative assets for tax-deferred growth and optional lifetime income. Advisors compare multi-year guarantee terms, surrender schedules, andfree-withdrawal features. Owners monitor renewal rates and liquidity needs for RMDs. Whenrates and product terms improve, a 1035 exchange may be considered after evaluating surrender charges and suitability.