Market-linked growth. None of the market losses.
A fixed index annuity credits interest based on an index like the S&P 500 — with a 0% floor, so a down year can't take your principal or your locked-in gains.
How an FIA works
Your money is never invested directly in the market. The carrier tracks an index and credits interest up to a cap or participation rate. If the index falls, you're credited zero — you don't go backwards.
- Index-linked interest with a guaranteed 0% floor
- Annual reset locks in each year's gains permanently
- Tax-deferred growth until you withdraw
- Typically 10% penalty-free withdrawals each year
- Optional income rider for guaranteed lifetime payments
Participate in the upside
When the index rises, your account is credited interest up to the carrier's cap or participation rate.
Protected in down years
A negative index year credits 0% instead of a loss. Your principal and prior gains stay intact.
Annual reset
Each year starts from your new, higher value — so you never have to climb back to break even.
Fixed vs. fixed index annuity
| Feature | Fixed annuity | Fixed index annuity |
|---|---|---|
| Interest crediting | Set rate, guaranteed | Linked to an index, subject to a cap or participation rate |
| Downside protection | Full — rate never drops | 0% floor — you never lose credited interest to the market |
| Growth potential | Predictable, limited | Higher in strong index years |
| Tax treatment | Tax-deferred | Tax-deferred |
| Lifetime income | Optional rider | Optional rider, often with roll-up bonuses |
Caps, participation rates, and spreads vary by carrier and can change. Surrender charges may apply to early withdrawals. Guarantees are backed by the issuing carrier.
How a fixed index annuity works
A short, animated walkthrough — how index-linked interest with a 0% floor and an annual reset grows your money without market losses.
Caps, participation rates, and spreads vary by carrier and can change. Surrender charges may apply to early withdrawals. Guarantees are backed by the issuing carrier. Chart values in the video are illustrative, hypothetical, and not a guarantee.
From index annuity clients
Upside when it's there. Protection when it isn't.
"I wanted growth but couldn't stomach another 2008. The index annuity gave me good years when the market ran and a flat year when it didn't."
"They explained caps and participation rates in plain English and showed me three carriers side by side. I never felt sold to."
"Rolled part of my IRA into an FIA with an income rider. Knowing a set amount hits my account every month for life changed how I plan retirement."
Get a side-by-side FIA comparison
A licensed agent will compare index annuity caps and income riders from A+ rated carriers — free, no obligation.