People that want the most for their investment dollars but also want a safe guaranteed investment are looking towards fixed annuities more often these days. There are a great many reasons to choose a fixed annuity over a CD. Often the rates are higher and the annuity gets tax-sheltered growth. Not all annuities are alike. When you select an annuity, shop just like you would for any other purchase. You want to buy the best annuity on the market.

Some of the items to look for in a fixed annuity are not as transparent as the interest rate. While the interest rate is a place to start, you need to look at certain specifications in the policy.

Each policy has an initial rate guarantee period. The initial rate is often quite attractive but if it doesn’t have a longer lock-in period, you might be stuck with a product paying low rates. Some companies have an extended initial rate guarantee but offer a first year bonus to make the product more attractive. After the initial year, the rate applied to the subsequent years is often much lower.

Each product has a minimum guaranteed rate of return also. This is the rate that no matter what the economic conditions, the company promises is the lowest you’ll ever receive. When interest rates at the bank drop below a percent, the minimum guaranteed rate becomes important.

On occasion, minimum investments become important. If you plan to remove money periodically until you deplete your policy, you’ll want to avoid a fixed annuity with a penalty if the funds fall below a specific amount. If you’re a smaller investor, you won’t even be able to start a fixed annuity if your funds don’t meet the company minimum.

See if you can add more funds and what the minimum addition must be. Once you find how easy the annuity is to manage for both organization and tax benefits, you’ll probably want to add more. Consider this aspect when going into a fixed annuity. You also may find that the older you get, the less complicated it is to have only one or two products.

It’s important to find out how long the surrender charges last on the fixed annuity of your choice. While some annuities have as short of a period as a year and then quit charging an early surrender fee, others may have one that lasts a lifetime and don’t go away even if you pass but require annuitization by you or your beneficiaries to avoid it.

While most annuities allow the beneficiaries to make the decision how they want the proceeds, those products that only allow them to annuitize or face a stiff penalty give them limited access. If you have children that spend money easily and you want this to last, it’s not a bad idea. However, you can get the same results using a spendthrift beneficiary designation for that child and still give other beneficiaries access to a lump sum settlement.

See if you have a right of withdrawal before the surrender period. Almost all annuities allow you to take the interest, but some allow as much as a 10 percent annual withdrawal from the product without a charge. Some of the annuities offer cumulative withdrawals. This means that if you don’t use it, you don’t lose it. Instead, if you don’t take the 10 percent withdrawal the first year, you have 20 percent the second year.

Shopping for an annuity is the same as any other major purchase. It requires that you shop carefully and look for features that are important for you. Even though you may talk to an insurance agent and look at the products he offers, check around for other products to see if his are the best for your situation.

Christopher Tyler educates on the topic of fixed annuities and other investment options for retirement. As the economy has fallen into the worst recession in decades more and more investors are looking for safe options to grow their investment for retirement. Come see to learn more about the fixed annuity as a viable investment for retirement.