Annuities are interest-earning contracts, issued and guaranteed by an insurance company.
Unlike those alternatives, you don't pay taxes on the interest from your annuity until funds are withdrawn, so your money can grow faster. Fixed annuities involve less risk than other asset-building tools. The insurance company guarantees your principal, so you don't face the investment risk associated with the stock market, for example. Your state insurance department supervises insurance company operations within your state. Any insurance product, including annuities, must be filed with that department prior to its sale.