How Fixed Annuities Offer Guaranteed Growth Without Market Volatility
In today’s unpredictable market, many savers are turning to fixed annuities as a secure, tax-deferred way to grow their retirement savings. These products offer guaranteed interest rates, principal protection, and no exposure to market losses—making them ideal for conservative investors or those nearing retirement.
Let’s say you invest $1,000,000 into a 5-year fixed annuity earning 5.40% compounded annually. At the end of the term, your account would grow to approximately $1,300,000—guaranteed, regardless of stock market performance. That’s over a quarter-million dollars in growth with zero risk.
At Diversified Insurance Brokers, we help you compare the highest fixed annuity rates available and match them to your unique retirement goals. Whether you need income in a few years or want to safely accumulate wealth, fixed annuities can play a key role in your strategy.
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FAQs: Fixed Annuities – Guaranteed Growth with Safety
What is a fixed annuity?
A fixed annuity is an insurance contract that guarantees a specific interest rate for a set period, along with protection of your principal. Your money is not invested directly in the stock market, so your account value is shielded from market losses.
How do fixed annuities provide guaranteed growth?
The insurance company credits a contractually guaranteed rate of interest to your annuity. That rate can be locked in for one or more years, depending on the product design. Because the rate is guaranteed, your account value grows predictably over time.
Are fixed annuities safe?
Fixed annuities are backed by the claims-paying ability of the issuing insurer. While they are not bank deposits, they offer principal protection and guaranteed interest under the contract. Many retirees use them as a “safe money” alternative to volatile investments. For a deeper overview, see our page on what insurance companies do with your money.
What is the difference between a fixed annuity and a MYGA?
A traditional fixed annuity may have interest rates that reset periodically, while a Multi-Year Guaranteed Annuity (MYGA) locks in a guaranteed rate for a specific term, such as 3, 5, or 10 years. You can compare current MYGA offerings on our current fixed annuity rates page.
How do taxes work on fixed annuities?
Growth inside a fixed annuity is tax-deferred. You do not pay tax on interest each year; instead, taxes are due when you withdraw funds. If the annuity is inside an IRA or other retirement account, distributions generally follow the same tax rules as that account type.
Can a fixed annuity provide lifetime income?
Yes. You can convert a fixed annuity into a stream of guaranteed income for a specific period or for life. Many people use fixed annuities as part of a broader plan to create reliable retirement paychecks. For more context, review our guide on the best retirement income annuities.
What are surrender charges and why do they matter?
Surrender charges are fees the insurer may apply if you withdraw more than the allowed penalty-free amount during the surrender period. They are designed to encourage long-term use of the contract. Before buying, it’s important to understand the length of the surrender schedule and the free withdrawal provisions.
How do fixed annuities compare to CDs?
Both CDs and fixed annuities can offer guaranteed rates, but annuities typically provide tax-deferred growth and may offer better yields for longer terms. CDs are issued by banks and may be FDIC-insured, while annuities are issued by insurance companies and backed by their financial strength. Many savers compare both when building a safe-income ladder.
How can I compare fixed annuity options?
You can start by reviewing interest rates, guarantee periods, surrender charges, and income options. Our annuity rate page and highest annuity rates today resources help you benchmark leading carriers side by side before requesting a customized quote.
About the Author:
Jason Stolz, CLTC, CRPC, is a senior insurance and retirement professional with more than two decades of real-world experience helping individuals, families, and business owners protect their income, assets, and long-term financial stability. As a long-time partner of the nationally licensed independent agency Diversified Insurance Brokers, Jason provides trusted guidance across multiple specialties—including fixed and indexed annuities, long-term care planning, personal and business disability insurance, life insurance solutions, and short-term health coverage. Diversified Insurance Brokers maintains active contracts with over 100 highly rated insurance carriers, ensuring clients have access to a broad and competitive marketplace.
His practical, education-first approach has earned recognition in publications such as VoyageATL, highlighting his commitment to financial clarity and client-focused planning. Drawing on deep product knowledge and years of hands-on field experience, Jason helps clients evaluate carriers, compare strategies, and build retirement and protection plans that are both secure and cost-efficient.
