how could you not find information on google? i did a search and this was the first one i thought was worth clicking, one of the top results, and it seems informative. http://www.forbes.com/sites/investopedia/2013/06/21/should-you-buy-an-annuity/

but i do not really understand draugnar's annuity. then again i do not know much about finances beyond how we are getting shafted. ... but the definition i read of an annuity is kind of like a pension, you put in a lot of money and in return get back payments, something like the same amount everytime, until the money runs out. which makes me wonder why you would invest in it, since you will have to do something with those payments, so you will need another place to put this money. i guess a bank.

... but draugnar's "annuity" seems just like investing in stocks or putting money in the bank, or something, if he can really take any of it out at any time.

Life as in life insurance, annuities, and more.

And blankbrain doesn't have a clue as to what annuities are. He only knows of the one specific type.

maybe he is suggesting something like a mutual fund. but his financial institution is calling it an annuity for some reason.

I can find information on google. I can't find good deals, or any sensible deal at all that's what I'm looking for. Just what it means. Some things don't seem to say anything about interest although I may just not get it.

I agree on the part that I don't see why Draugnar's annuity is an annuity though. For now it sounds like a really good interest on a bank account for big bunches of money with a few buts that shouldn't bother anyone (with enough money). I mean, if you wait a year and need 50 bucks, you just get 250 bucks, you did make more than 200 bucks extra profit after all.

So yeah, I still can't figure out how Draugnar gets 6.5% or something interest for what sounds like a bank account with slightly limited service. However, if that's a possibility for me too...

5.75% and it was when interest rates were up and it is a fixed rate. It's an annuity because, unlike a savings account, you can't just go and make a deposit any time you want in any amount you want. You literally have to buy another annuity to put more money in and that will actually be a new one with a new interest rate based on the present rate.

ok i read another page. apparently there are variable annuities, and that is likely what he has. they are mutual funds with insurance on top. so you supposedly get all the potential profits of a mutual fund, but all the safety of a bank account. too good to be true? yes, because they apparently charge really high fees. so... i dont know, variable annuities could make sense. but if you are willing to take risk, or willing to not have the option of accessing your money for two years, there might be better options...

i personally hate insurance companies, but i can see how it could make sense for some people in some situations.

And that's no offence Draugnar. If anything, you made an amazing deal. I just don't fully grasp it I suppose.

So, how expensive is it to buy an annuity for you? Are there any other costs?

Asked to Draugnar naturally.

As I said, interest rates were higher when bought. We could never get that rate now. Back when we got it, home loans were running the same rate. So at best, you may get what you would pay for a home loan, maybe 2-3%.

ok maybe i just do not understand the technical definitions... if he is getting a fixed rate then i really do not see how it is much different than putting your money in the bank. if not being able to put more money in makes it an annuity then the definition of annuity is retarded. then again, financial definitions tend to be.

Just a high deposit amount was the only costs associated for us. Do you have 50 grand US? Set it up. You might find one for 20 or 25, but I doubt anything less than 10.

Well, thanks for the info. I'll think it through some more, but sounds good if it works here too.

Do you happen to know any synonyms of annuity by the way? Just in case I can't find certain stuff by that name or translated from that word.

you are unable to find search results matching his definition because his definition is weird. you should probably just get a pamphlet from your bank with the different investment options. i guarantee you a fixed rate return on investment with a minimum capital will not be called an annuity. an annuity would have to have the potential to make more money, at least. so do not pay attention to his wording.

oh actually now that i think about it... maybe if an insurance company is involved then it can be called an annuity.... maybe.

so... you typically loan money to a bank on their promise to pay you back 4%, that is not an annuity. but if you put your money in a bank, the bank then goes out and invests it in some crazy stocks, to try to get as much out of the market as they can, but pay money to an insurance company to make sure you always get paid 4% then it can be called an annuity.

maybe. i am trying to be generous here.

blankflag, honestly, what does it matter? He explained what he means with it, I asked for synonyms which I'm sure he'll give me if he knows any and, no offence, but you're not quite the expert it seems.
Can you tell me what is the right word for it? Because, honestly, telling me what are the wrong words according to you is not going to help me.

It's hard to say what it might be called and it may only be available because of the way we did it. We took an inheritance account/annuity from a family member who passed and had it rolled into this account. so it may be something specially created for this purpose.

Ah, so it's more like a annuity adapted to be a bank account, or something like that...
I doubt if that makes a difference for the bank though. A bank probably doesn't care where the money comes from as long as it's legit, does it?

Basically, as I understand it, you have the same thing as me except that I can move any amount of money and I get much less interest.
Basically just a saving bank account. Except I get half the interest you estimate. If that is what it really is, I fear there's little I can change except changing to a bank that has a little higher interest at the moment...

I don't pay too much attention to the news, but I think I remember that, of the big banks, where the government promises to pay back any money up to a certain amount if the bank goes broke, all but one are nationalised thanks to bailouts I believe, and the nationalised banks have certain restrictions. Since they are basically funded by the government, they are not allowed to take big risks, so go below or above (below for loan, above for bank account) the one big bank that isn't funded by the government when it comes to interest. So basically one bank gets to set the standard and presumably sets it low (and possibly high for loans) for the most profit.

That might be the reason for the much lower interest here, if that makes sense?
In that case I might just not have a good option. Or go to foreign banks? Would their governments insure foreign clients like ours does to us? Which country? Anyone knows anything about this?

And I might still get this wrong. Please don't hurt me lolz :P

Steephie - in the UK the government guarantees deposit holders the first £85k. You need to check what the netherland's limit is. If you are investing more, split it between any number of accounts at different banks as they will the guarantee all your funds if you spread it around. You may lose a trifling amount of interest but cut down on the risk.

I see. And what does deposit holding actually mean in practice?

Also again thanks everybody for answering!

It means your money is in their hands. Plain and simple.

So you effectively loan them your money and the government guarantees you gain back the money you lose, meaning the only risk you take is losing your interest? Do I get this right? What's the profit like usually? Like, 5%? Higher? Lower?

I'm guessing lower?

It means if the bank fails, whatever your balance was at the time it failed is guaranteed. So you don't lose previously gained interest. But those banks have to do business in accordance with very strict regulations.

Ah so now we are just talking about regular bank accounts? Or locked bank accounts for a set amount of time?

The government guarantees desposits at a bank up to a certain limit. Annuities are a form of consumption smoothing - sort of like a bond - except instead of having a fixed term, the term is your life.