Daily average crediting is a method of calculating indexed annuity interest. Interest is calculated based on the average of daily index values over the crediting period. Daily average crediting reduces volatility but typically results in lower returns than point-to-point crediting in strongly trending markets.
Key Points
- Daily average crediting: interest based on average of daily index values
- Reduces volatility compared to point-to-point crediting
- Typically lower returns than point-to-point in strongly trending markets
- Alternative to point-to-point and monthly average crediting
- An independent agent can help you compare crediting methods