With the recent fluctuations of the economy as well as the looming credit crisis, it was but natural that annuity rates take a beating. One of the first moves by the government and the Federal Reserve were to bring down interest rates in order to level the credit crisis that had the nation in its grip. This of course, did not bode well for bank investors. With inflation also playing a role, the returns from the bank look even bleaker.

In terms of investments, stocks and bonds too don’t seem to have much appeal. This includes to the conservative investor as well. One of the best forms of savings in the current economic situation is through fixed annuity rates. Since these accounts are insured, there is a guaranteed monthly income from them. The rates are something that even banks are unable to rival.

The way this works is that the longer term you opt for, the better your earnings are. In the case of annuities the rates remain the same for the duration of the contract. For those who like to plan, the rates are generally between 5.5 per cent and 6.5 per cent. When your contract is done, you can withdraw the amount accumulated completely and reinvest in places that may give you a better return. This gives you a better standing in terms of investment decisions a few years in the future. In the event of you passing away, the fund will transfer to the nominee

What you should also know about annuity rates are that the tax benefits that it carries is unlike any other medium of investment. As an annuity account holder you are basically accumulating savings. It is a surefire means of a guaranteed income for the rest of your life.

Despite the constant change in the economy and ongoing credit crisis, annuities are a stable source of income. This is primarily because of the fixed interest rates when you first open the account. You are given a choice on the rate of interest you would like to choose. With the gradual increase in your accumulated wealth, you can opt to withdraw funds and reinvest them where you deem fit. This is the kind of security no other investment and savings plan can give you.