Fixed annuity: immediate or deferred, what are the advantages of each annuity type? An immediate income annuity will start to pay out regular payments right away. With a  deferred annuity, funds are paid in and interested is credited during the first phase, before payments begin. A "CD annuity" is a type where the interest rate is guaranteed to stay the same during the agreed-upon period, say, five years, similar to a bank CD. Fixed income annuities are not securities; thus, they are not regulated by the SEC. Variable annuities are securities; they are regulated by the SEC. If you follow the annuity rules, your annuity will accumulate earnings on a tax-deferred basis until you make withdrawals.  An equity-indexed annuity is a special type in which, while you are paying into the instrument, the insurance company gives you a return which is based on some stock market index.  At the end of the accumulation period, you may get regular payments, or a lump sum, if that option was part of the annuity contract.  Annuities can be tax-deferred. This  means you don't pay  taxes on the income and investment gains from your annuity until you withdraw your money. The regular, periodic annuity payments mean that you won't be outliving your benefits. Many companies that sell annuities are large financial institutions like Fidelity, Prudential Insurance, or Metlife.