  Annuity - Definition Definition: An annuity is a type of investment that guarantees payments of specific amounts at specific times. You can either receive periodic interest or a lump sum payment. They come in two forms: fixed and variable. Fixed annuities are like CD's that pay a set rate of return. Variable annuities allow you to invest in stocks and bonds and the rate of return depends on how your investments do. TeenAnalyst Advice:
Annuities are great for people who would like to receive a steady
income stream. For example, if you had $1 million and invested
that in a fixed annuity at 3%, you would receive $30,000/year
in interest. Related Sections
on Our Website Investing
- Learn more about investing
basics and strategies.
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