Personal Retirement & Savings:
Accumulation Annuities (AAs)
Accumulation Annuities (AAs) are similar to GICs, but are only offered through the insurance industry. Because Accumulation Annuities are offered by a life insurance company, they have different guarantees as well as the added benefits of a beneficiary designation and potential creditor protection.
There are several options in starting with Accumulation Annuities. You can begin with a lump sum, make regular periodic deposits, or make deposits on a flexible payment basis. The annuity grows as deposits are made and also earns interest. Accumulation Annuities can be held as part of a registered or a non-registered savings plan and you are guaranteed a set interest rate over a predetermined term.
Why Should I Invest in Accumulation Annuities Instead of a GIC?
Accumulation Annuities offer several advantages for those thinking of estate planning. You can name a beneficiary, avoiding the trouble and expense of estate and probate fees. These accounts are also typically protected against seizure by creditors, if the beneficiary qualifies, providing a line of defence against an unexpected lawsuit or bankruptcy.
Accumulation Annuities are affordable, with monthly contributions as low as $50 (or $25 for juveniles), and you can make a lump sum payment at any time. You’ll also be able to select from a variety of investment terms — daily interest or guaranteed interest investments, with terms from one to 10 years.