CD Type Annuities are a special class of fixed annuities. These annuities have been placed in a class by themselves because they have one unique characteristic: The interest rate is guaranteed for every year in which a surrender charge exists. In other words, like a bank CD, the insurance company guarantees a fixed interest rate for a certain period of time, such as 5 or 10 years. (By contrast, in a traditional fixed annuity the insurance company "resets" the interest rate every year on the anniversary of your initial deposit.) All annuities impose surrender charges, usually decreasing over time, to discourage short-term investment. Surrender charges will reduce the value of - and the return on - your investment, and only apply if you withdraw your money before the end of the contract period. But if you have a long-term investment horizon, CD Type Annuities offer guaranteed interest rates that will grow your money tax-deferred for years to come.