Finding the best rates for your fixed annuity is not as hard as you might think. There are lots of places you can look to for competitive rates of interest. Don't just take the first offer from your insurance agent or financial adviser; see whether you can find a better contract online or with another broker in your area.
Ask your insurance or investment agent or broker whether insurance carriers are running any specials right now. Carriers often offer contracts that pay promotional teaser rates as an incentive for buyers. If one of these contracts fits your investment objective and time horizon, then it might be ideal for you.
Log on to a website like annuityfyi.com to see what rates are offered there. Sites such as this do much of the shopping for you by following the rates and contracts offered by many carriers and listing the best ones available each day.
Make sure the rates you're comparing are for annuities of at least roughly the same terms. If you compare a 10-year contract to your current two-year annuity, then the rates are going to be higher.
Remember to look at variable contracts for fixed rates as well. Most variable annuities contain a fixed account option that pays a guaranteed rate. If you are willing to consider low-risk variable investment alternatives, such as government or corporate bond funds, you might be able to find a variable contract that offers a dollar-cost averaging special. These programs will initially place all of your funds in a guaranteed account that pays a high fixed rate of interest, while systematically transferring the balance in the fixed account into a preselected portfolio of sub-accounts, or mutual-fund choices.
Mark Cussen has more than 17 years of experience in the financial industry. He received his B.S. in English from the University of Kansas and became a Certified Financial Planner in 2001. He has published financial educational articles on such websites as Investopedia and Money Crashers. He also provides financial education and counseling for members of the U.S. military and their families.