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Annuities are a form of investment issued by Insurance companies and offered through Insurance agents. The investor pays into the annuity, and after a set period of time, the annuity pays the investor returns. With fixed annuities, the principle is guaranteed. Annuities offer a safe, tax-deferred way to accumulate wealth, and are very popular as retirement savings plans.

A fixed annuity offers you a predictable rate of growth for your investments, and guaranteed future income. You won't experience the swings in value that you would see if you put the same money into the stock market. And, you have the choice to make one single upfront payment, or to make fixed payments over time.

Several factors are used to structure annuities such as changing the time period of money accumulation, changing the number of income payments and others, etc. A fixed annuity offers security to the investor as the issuing company confirms a minimum interest to the investor for a set period of time beforehand. Often, with fixed annuities, policyholders can get a minimum benefit payment as well. Thus, in the case of a fixed annuity, the investor already knows the expected interest from the annuity before signing the contract.

Fixed annuities are paid out in different ways. One option is immediate payment annuities. This option allows individual investors to turn a lump sum into a stream of income because the annuity is paid out at a fixed monthly rate, beginning immediately.

With tax-deferred annuities, the investor either deposits a lump sum and accumulates interest over time, or makes payments into the annuity, with the returns being paid out after a set period of time. This kind of fixed fixed annuity is often used as a retirement savings plan. Many individuals fail to plan for their income needs in retirement. In many cases a fixed immediate income annuity can fill the gap.