This is another interesting type of annuity where the policy holder starts receiving payments after a single payment is made. Payments from Immediate fixed annuity as the name implies are almost immediate after the tenor of investment expires. Many people who are desirous of a quick return on investment, or an investment with a short incubation and maturity period normally go for immediate fixed annuity plans. A quick check is most likely to show that these kinds of investors are conservative in nature and will not be able to bear the risk that comes with high yield investments. A sizeable number of these people are those thinking or retiring or those who are already in retirement.

The beauty of immediate fixed annuity is how quick the payment time comes. Payment is normally done to policy holders depending on the time periods that were chosen when the investment was made. Several reasons determine the kind payment time period which an investor will prefer to be paid by. One of such reasons is the use to which the investor may want to put such payments to. For most people who decide to receive a monthly payment, their payments are most times used to pay domestic bills, groceries, gasoline fuel for the car, pocket money etc. Most of these people are already retired from active work.

Another set of people normally prefer their payments to come either quarterly, annually, or semi-annually. A sizeable chunk of these people who take immediate fixed annuity are still in active service and may not need payments to finance day to day living expenses. Most of them buy annuities as a way of investment and normally strive to re-invest whatever periodic payments they receive to further boost the size of their accounts. Purchasing immediate fixed annuity is a good thing to do especially if it is an alternative source of income. It helps you to financially stable and confident especially when time for retirement is fast approaching.

A serious disadvantage of immediate fixed annuity that we should always consider carefully is that because the tenor or maturity date is normally short, the interest rates may not be much appealing. And in some situations where the inflation rates may be upbeat without any serious restraints, the interest payments made to you at the end of the day may lose their value, or purchasing power because inflation. This may make the whole thing less profitable than you had earlier thought.

The interest rates for immediate fixed annuity may be fixed or variable. Fixed rates are a set of pre- determined interest rates that will be paid to a policy holder at the maturity date of a purchased immediate fixed annuity. Rates can also be variable when the annuity plan purchased is tied to performance of financial market indexes. In this case the rates fluctuate as the market indexes change also. The higher the index, the higher the interest payment and vice versa. It left for the policy holder to choose which type of interest payment they want depending on the options available.