Deferred Annuity Rates

The income payments from a deferred annuity often start many years later.  Deferred annuities have an accumulation period, which is the time between when you start paying premiums and when income payments start.

During the accumulation period of a fixed deferred annuity, your money earns interest at rates set by the insurance company or in a way spelled out in the annuity contract.  The company guarantees that it will pay no less than a minimum rate of interest.  During the payout period, the amount of each income payment to you is generally set when the payments start and will not change.

Current Interest Rates

The current rate is the rate the company decides to credit to your contract  at a particular time.  The company will guarantee it will not change for some time period.

• The initial rate is an interest rate the insurance company may credit for a set period of time after you first buy your annuity.  The initial rate in some contracts may be higher than it will be later.  This is often called a bonus rate. 
• The renewal rate is the rate credited by the company after the end of the set time period.  The contract tells how the company will set the renewal rate, which may be tied to an external reference or index.

The minimum guaranteed interest rate is the lowest rate your annuity will earn.  This rate is stated in the contract