BIRDSEYE FINANCIAL SERVICES (360) 722-7889
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Educate Yourself

Index Interest Potential
Index Interest Potential
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Another advantage of a fixed index annuity is the opportunity to accumulate interest based on changes in an external index.
Some FIAs offer you a choice of indexes rather than just one. In addition to choosing your indexes, you can also determine what portion of your annuity’s value will be based on each index chosen.

Although an external market index or indexes may affect your contract values, the contract does not directly participate in any stock or equity or bond investments. You are not buying shares of any stock or index fund.


FIA’s Indexed Interest Potential
When you purchase a fixed index annuity, you can allocate its value to one or more chosen indexes. A crediting method is then used (which will be defined later) to track the performance of your index(es). At the end of each contract year, the indexed interest is calculated.
  • If the result is positive, you will automatically receive indexed interest, subject to a participation rate and a cap or spread (which will also be defined later). That interest is locked in each year and cannot be lost due to index declines at some point in the future.
  • If the result is negative, nothing happens – and that can be good news! Although you won’t receive any indexed interest for the year, your annuity’s value doesn’t decline.
Factors that influence how a FIA’s indexed interest is calculated
When you purchase your fixed indexed annuity, you can often choose the index(es) to which you allocate your annuity’s value.  You can also choose the crediting method used to track changes in your chosen index(es).  Before discussing those crediting method choices, it’s good to look at some other factors that will affect how your indexed interest is calculated.
  • Cap:
Some fixed index annuities set a maximum rate of interest (or cap) that the contract can earn in a specified period (usually a month or year). If the chosen index increase exceeds the cap, the cap is used to calculate your interest.
  • Participation Rate:
In some annuities, a participation rate determines how much of the index increase will be used to calculate your indexed interest. (Participation rates are generally applied after caps, and before a spread.)
  • Spread:
The indexed interest for some annuities is determined by subtracting a percentage from any gain the index achieves in a specified period. For example, if the annuity has a 4% spread and the index increases 10%, the contract is credited 6% indexed interest.

FIA Crediting Method Choices
No single crediting method consistently delivers the most interest under all market conditions.
A quick definition of some popular crediting method choices is provided below. For a better understanding of how each crediting method works, talk to us and we are happy to provide you with additional information.  Keep in mind that caps, participation rates, and spreads will also enter into the calculation of indexed interest, and may reduce the amount of interest credited.
  • Annual point-to-point. 
This method tracks changes in the market index from one contract anniversary to the next and credits interest based on that annual change.
  • Monthly sum.
With this method, individual monthly increases and decreases in the index values are tracked and added up. Their sum helps determine the indexed interest credited to the annuity.
  • Monthly average.
For this method, the individual monthly index values are totaled, and then divided by 12 to find the average. The starting index value is subtracted from the average to determine the amount of positive or negative index change. This amount is divided by the starting value to determine the percentage of interest credited to the annuity.


The Benefits of Automatic Annual Reset
Annual reset is a common FIA feature. At the end of each contract year, your annuity’s index values are automatically reset. This means this year’s ending value becomes next year’s starting value. Annual reset also locks in any interest your contract earned during the year.
With this greater responsibility comes a need for possible financial solutions that can help provide a level of protection for retirement savings. Whether your long-term objective is to build a source of guaranteed lifetime income, save for a specific retirement goal, or leave a legacy for your loved ones, we are here to help you.

We offer financial vehicles that are effective in providing potential for accumulation, growth and safety of principal in challenging times, and that can help you feel confident about your retirement savings strategies.
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Step One
Time to Rethink Retirement
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Step Two
Understand the Basics
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Step Three
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Who's who in an Annuity
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Step Four
Understand the Benefits
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Step Five
Tax Advantages
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Step Six
Index Interest Potential
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Step Seven
Protection Benefits
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Resource Page
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Vendor Bookings

Birdseye Financial Inc
136 Hillside Dr E
Burleson, TX 76028
Main # 360-722-7889
Texas # 817-704-3544
Fax #425-412-6865
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INFO@BIRDSEYEFINANCIAL.COM
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The contents of this website are for educational purposes only. Any material and its attachments, links, downloads, and/or any emails from our company are not intended to provide legal or tax advice. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal or state tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. Please seek the advice of appropriately licensed individuals for legal or tax advice relating to your individual situation. Birdseye Financial and its employees are not tax or legal advisors and are not operating in such a manner. Birdseye financial and those working for the company are not licensed Investment Advisors which prohibits us from offering such advice. Any advice you get should be taken as non-investment advice and only educational in nature. Should our clients need a licensed investment advisor, we partner with LifePro Asset Management. *Investing carries an inherent element of risk. No strategy can guarantee a profit or prevent a loss. Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary or investment advice. Any illustrations used are hypothetical and were used for explanatory purposes only. THANK YOU!

MEDICARE MANDATORY DISCLAIMER
“We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all your options.” (MORE DETAIL)

State Licenses

AZ #7101306, CA #4140429, FL #W825259, ID #863617, MA #2176921, OK #3001663224, OR #7101306, TX #2695866, WA #190780

This calculators and illustrations on this website are designed to be information and educational tool only, and when used alone, do not constitute investment advice. We strongly recommend that you seek the advice of a financial services professional before making any type of investment. We also encourage you to review your insurance and investment strategy periodically as your financial circumstances change.

This report is for illustration purposes only. PAST PERFORMANCE IS BASED ON HYPOTETHICAL HISTORICAL DATA AND IS NO GUARANTEE OF FUTURE RESULTS OR INTENDED TO PREDICT ACTUAL PERFORMANCE. ACTUAL INTEREST CREDITING RESTULTS WILL VARY BASED ON MARKET CONDITIONS< INDEX ALLOCATIONS< AND INTEREST CAP RATE / SPREADS / PARTICIPATION RATES. The use of different time periods and amounts will vary results.

S&P 500 and S&P are registered trademarks of Standard and Poor's Financial Services LLC. No annuity or financial product discussed herein is not sponsored, endorsed, sold, or promoted by Standard and Poor's Financial Services LLC, S&P Dow Jones Indices LLC, or their affiliates, and non of the Stand and Poor's Financial Services LLC, S&P Down Jones Indices LLC, or their affiliates makes any representation regarding the advisability of purchasing an insurance or financial product.
  • Home
  • About
    • Welcome to Birdseye
    • Who We Are
    • Risk & Portfolio Assessment
    • Request Free Consultation
  • Strategies
    • Key Components
    • Inflation Impact
    • Rule of 100
    • Sequence of Returns
    • Volatility Buffer >
      • Volatility Buffer Webinar
    • Tax Strategies >
      • Tax Free Income
      • RMD Calculator
      • IRA RMD RULES
      • ROTH IRA
      • Tax Declassified Webinar
      • Qualified Charitable Donation
      • Business Tax Credit
    • Educational Webinars >
      • Taxes Declassified
      • Top 10 IRA Mistakes
      • Taxes in Retirement
      • 3 Economic Strategies
      • Five Key Areas of Retirement
    • Educational Videos
    • Documentaries
  • Planning
    • Retirement Analysis
    • Social Security >
      • Social Security Webinar
    • Pension Maximization
    • Risk Analysis and Investments
    • LifePro Asset Management
    • Federal Benefits >
      • Federal Benefit Kit
    • Business Tax Credit >
      • Research & Development Tax Credit
      • Employee Retention Tax Credit
      • Resources
  • Insurance
    • Annuities
    • Medicare >
      • Medicare Questionnaire
      • Medicare Networks
      • Medicare Clients
      • Medicare Rules
    • Long-Term Care
    • Premium Financed
    • Life Insurance
    • Final Expense
    • Health Insurance
    • Dental Insurance
    • Vision Insurance
  • Tools
    • Financial News Blog
    • Market Index Links
    • Required Minimum Dist (RMD Calculator)
    • Calculators
    • Professional Referrals
    • Bankrate Interest Rates
    • Zillow Home Value
    • Slides >
      • Slides - Intro Step
      • Slides - Hegna
      • Slides - Strategy
      • Slides - Taxes
      • Slides - Invest
      • Slides - Buffer
      • Slides - FIA
      • Slides - Income
  • Contact
    • Free Consultation
    • Schedule Appointment
    • Online Meeting
    • Secure Upload
    • Retirement Analysis
    • Application >
      • Beneficiary Form
    • Retirement Portal
    • Rate our Service
    • Refer a Friend