Annualized Interest Rate Calculations (Fixed Accounts): With a variable annuity, typically all or some of the investor's money can be put into an account that earns a fixed interest rate, backed by insurance company's general assets. Typically...
- The interest rate is determined by the daily rate when the premium is paid, and the fixed account selected.
- Funds may be allocated among the one-year or three-year fixed account or to both.
- The interest rate on the one-year fixed account is guaranteed for one year and the interest rate on the three-year fixed account is guaranteed for three years.
- Initial premiums allocated to fixed accounts are protected by an initial premium guarantee. If the contract is surrendered, the premiums initially allocated to the fixed accounts will be refunded, regardless of any surrender charges due. This guarantee does not apply to partial withdrawals or transfers of money from fixed accounts – DCA transfers among sub-accounts included.
- The minimum guaranteed interest rate for both the one-year and three-year fixed accounts varies by jurisdiction.
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