An FIA spread (or margin) is a percentage subtracted from positive index performance before interest is credited. If an index gains 9% and the spread is 2%, credited interest is based on 7% before other limits. Spreads are reset periodically and trade off against caps and participation rates.Monitoring spread changes helps maintain realistic expectations about FIA accumulation.

When spreads increase, advisors may shift allocations to capped or higher-participation strategies.Annual reports show how spreads can reduce credited interest even when the index posts strong gains.