HOW IS THE INTEREST RATE DETERMINED FOR MY FIXED DEFERRED ANNUITY?
During the accumulation period, your money (less any applicable charges) earns interest at rates that change from time to time. Usually what these rates will be is entirely up to the insurance company. Annuity Definition
Current Interest Rate
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.
Minimum Guaranteed Rate
The minimum guaranteed interest rate is the lowest rate your annuity will earn. This rate is stated in the contract.
Minimum Interest Rates
Some annuity contracts apply different interest annuity rates to each premium you pay or to premiums you pay during different time periods.
Other annuity contracts may have two or more accumulated values that fund different benefits options. Theses accumulated values may use different interest rates. You get only one of the accumulated values depending on which benefit you choose.