Monthly average crediting is a method of calculating indexed annuity interest. Interest is calculated based on the average of 12 monthly index values compared to the beginning index value. Monthly average crediting reduces volatility but may result in lower returns in strongly trending markets.
Key Points
- Monthly average crediting: interest based on average of 12 monthly index values
- Reduces volatility compared to point-to-point crediting
- May result in lower returns in strongly trending markets
- Alternative to point-to-point crediting
- An independent agent can help you compare crediting methods