In the wake of the terrible financial crises of the last few years, investors have become more acutely aware of the advantages offered by the rare investment annuities, which offer both guaranteed principal and interest rates. When the market is in free fall, these rates offered by annuities are still guaranteed. For anyone searching for the best fixed annuity rates, there are a number of criteria to consider when shopping for these products which allow investors to sleep easier at night.

Main Criteria to Consider in Searching for the Best Fixed Annuity Rates

Although best is often considered to mean the highest rate for an annuity, this is not always the case. The best fixed annuity rates should be those which most appropriately measure up to the investors' goals. There are four factors to keep in mind for finding the best fixed rate annuities.

• The interest rate has to be balanced against the flexibility of the annuity contract.
• A financially strong and reputable insurer has to be located.
• A longer term contract will yield better rates of return.
• The best rates are often obtained by looking around when the interest rates are very high.

Although these four factors typically lead to higher returns with lower actual risk, there are trade offs typically involved. A longer commitment provides a lesser degree of flexibility, but a higher rate. Anyone who wants to achieve the greatest account value increase will search for the annuities with the lowest flexibility which they can tolerate while offering the very best rate possible.

Secondary Criteria to Consider in Searching for the Best Fixed Annuity Rates

• Amount of time that the rate is guaranteed
• Withdrawal provisions for terminal illness or disability
• Charges for early withdrawal
• Allowance for withdrawals without penalty
• Charges for surrendering contract or withdrawing entirely

Flexibility versus Highest Yield in Finding the Best Fixed Annuity Rates

The highest yielding annuity on the market does not make the best annuity available, in and of itself. There are trade offs on all investments, including annuities. Higher rates commonly come with longer terms, harder withdrawal schedules, lessened periods of rate guarantee, and a bigger upfront premium. In the majority of investors' cases, a good balance between versatility and higher rate will prove to be the best option.

Purchasing A Longer Term Annuity to Find the Best Fixed Annuity Rates

Generally, the higher rates come with longer time frame commitments, as well as with bigger upfront premium deposits. Since they are capable of garnering greater returns on investments made with the individual's premium money, insurance firms want to hold on to the person's money as long as they possibly can. Because of this, they generally feature incentives and bonuses for agreeing to a longer time frame contract. Since the majority of individuals are saving for the longer term retirement time frame anyway, this can work to the person's advantage. Only be mindful of the included limit for penalty free withdrawals, so that any emergencies that need money withdrawn will not be found wanting.

Longer Guarantee Periods for the Best Fixed Annuity Rates

It is essential to optimize the length of the period of rate guarantee when shopping for the best fixed annuity rates. A lesser rate which is guaranteed for a full ten years is better than a higher rate which is only good for the first year or two. These guaranteed rates are as good as gold. Whatever happens to the market and underlying interest rates will not affect the rate of these annuities, so long as they are in the guarantee period.