Frequently Asked Questions
Everything you need to know about Fixed Annuities for credit unions and nonprofits
About Fixed Annuities
What is a Fixed Annuity (FA)?
A Fixed Annuity is a deferred annuity contract that provides your organization a stated interest rate for a defined period. Your rate is locked in at the time of purchase and remains stable regardless of market conditions, providing predictable, reliable growth with 100% principal protection.
How does the principal protection work?
With our Fixed Annuities, 100% of your principal is protected. Your investment earns a contractual stated rate and will never decrease in value due to market fluctuations. This makes Fixed Annuities ideal for organizations focused on sustainable fiscal management and predictable returns.
What term options and rates are available?
We offer multiple term options (2-7 years) with competitive stated rates. The rate you receive depends on the term selected and your investment amount. Our team will help you select the option that best aligns with your financial objectives.
Interest Rates & Returns
What is the Minimum Interest Rate (MGIR)?
Every contract includes a Minimum Interest Rate (MGIR) that provides a floor for your earnings. The MGIR is established at issue and resets each time the contract is renewed, ensuring a baseline return regardless of market performance.
How are interest rates determined?
Credited interest rates vary based on the elected term and purchase payment size. Once set, your rate remains stable throughout the term, providing predictability for budgeting and financial planning.
What returns can I expect?
Returns depend on the term selected and prevailing rate environment. Our FAs are designed to provide competitive growth potential while protecting your principal. The MGIR provides a contractual floor, and stated rates are locked in for your elected term.
Terms & Flexibility
What term options are available?
We offer terms ranging from 2 to 7 years. The term you select determines your credited interest rate and surrender charge schedule. Longer terms typically offer more favorable rates.
Can I access my funds before the term ends?
Yes. You can access up to 10% of your contract value annually without surrender charges, providing liquidity when you need it. Withdrawals beyond the 10% free amount may be subject to surrender charges and market value adjustments.
What are the surrender charges?
Surrender charges apply during the initial term and decrease over time. For example, a 7-year term starts at 7% and decreases to 3% by year seven. Charges vary by state and term selected. The 10% annual free withdrawal is always available without charges.
Can I make additional contributions?
Yes, you may contribute additional purchase payments during the first contract year, allowing you to adapt to favorable market conditions and enhance your investment flexibility.
Accounting & Regulatory Compliance
How should the FA be classified for accounting purposes?
Our FAs offer flexible accounting classification depending on your liquidity needs and investment intent. The annual 10% access feature provides flexibility, potentially allowing a portion to be treated as a current investment. We provide documentation to support your chosen approach and ensure it meets regulatory requirements.
What determines the accounting classification?
The key factors are holding intent and liquidity access. For current classification, the investment should be intended for short-term use with regular liquidity access. For long-term classification, the investment should be viewed as a strategic asset. Our solutions are designed to meet credit union regulatory requirements, and we provide documentation to support either approach.
What documentation do you provide?
We provide comprehensive documentation including board presentation materials, investment policy alignment reviews, and examiner-ready compliance documentation — all designed to support safety and soundness standards. Our team can also attend board meetings virtually to answer questions and support the approval process.
Getting Started
What is the minimum investment amount?
Minimum investment amounts apply and vary by product and institution. Contact us for details on the options available for your specific situation and investment goals.
How do I get started?
Schedule a briefing with our team. We'll assess your liquidity needs, review your investment policy, discuss your financial objectives, and provide a customized proposal for your credit union. The process is straightforward and we handle all the documentation.
Is this product available in all states?
Availability and specific terms may vary by state. Not all term options may be available in all locations. Our team will confirm availability and applicable terms for your state during the consultation process.
Tax & Benefits
What are the tax advantages?
FAs offer tax-deferred growth, meaning your investment grows without immediate tax implications on earnings. This allows for compound growth over time and can enhance your overall return compared to taxable alternatives.
Are there income options?
Yes, FAs can include options to create a stream of lifetime income. This can be valuable for retirement planning and ensuring staff retention through secure benefit programs.
Still have questions?
Our team is ready to help you understand how Fixed Annuities can work for your institution — built on safety, soundness, and trust.
Schedule a Briefing