In a fixed annuity, which statement about interest crediting is accurate?

• A. It always credits only a guaranteed minimum with no current rate
• B. It never credits a current rate
• C. It is tied to the insurer's stock portfolio
• D. It may credit a current rate in addition to guaranteeing a minimum rate

Answer: (D)

In a fixed annuity, interest crediting includes a guaranteed minimum rate, and many contracts also allow a current rate to be credited when the insurer declares it. The guaranteed minimum protects you regardless of market conditions, while the current rate can add extra growth if the insurer declares a favorable rate. The current rate is not guaranteed and can change over time. This combination is why the statement that it may credit a current rate in addition to guaranteeing a minimum rate is accurate.

The other ideas don’t fit: fixed annuities aren’t tied to a stock portfolio, and they don’t universally credit only a guaranteed minimum without the possibility of a current rate.