The short version
There is no index in this contract and no participation in market returns, so the declared rate is the whole story on the growth side. The rest of this page is about what that costs in flexibility.
How this contract works
A multi-year guaranteed annuity works the way a bank CD works, with an insurance company in place of the bank. You hand over a single premium, the carrier credits a declared rate, and the interest compounds inside the contract without being taxed until it comes out. The guarantee is a contractual obligation of Nationwide Life Insurance Company, backed by the company's own reserves — not by the FDIC, and not by any bank.
The rate is locked for the guarantee period; at the end of it, contracts typically offer a window to withdraw, renew at then-current rates, or annuitize. Confirm the terms in the carrier's disclosure.
The minimum premium is $10,000, and the carrier will issue the contract up to age 199.
Getting your money out
The contract allows 10% out each year without a surrender charge. Beyond that allowance, a withdrawal during the surrender period is reduced by the charge for that contract year.
Fees and tradeoffs
Our rate data carries no fee figure and no rider for this contract. That is a gap in the data, not proof that neither exists — waiver-type riders such as a nursing-home or terminal-illness benefit sit entirely outside what it reports, so check the carrier's brochure or ask the carrier directly before treating the contract as costless. What is certain is that the carrier is compensated either way: its margin is built into the declared rate, which is why comparing the rate against other contracts of the same length matters more than hunting for a fee schedule.
The real tradeoffs on a contract like this are tax and timing, not fees. Gains come out as ordinary income rather than capital gains, and a withdrawal before age 59½ generally carries a 10% IRS penalty on top of the tax. Neither is a reason to avoid the product; both are reasons it suits money you have already decided not to touch.
Who this fits
The buyer this suits is the one who has already decided the money is not going to be touched, and wants to know exactly what it will be worth at the end. Certainty is the product; there is nothing else being sold here.
It is the wrong contract for anyone who might need the principal early, for a buyer who wants market participation or inflation protection, and for money that is already an emergency reserve. Under age 59½, the 10% IRS penalty on early withdrawals is an additional reason to look at this as long-term money.
The carrier
Every guarantee in this contract is only as good as Nationwide Life Insurance Company, which currently holds an A.M. Best financial strength rating of A+. An annuity is not FDIC insured; the backstop is the carrier's own balance sheet, with state guaranty association coverage behind it at limits that vary by state.
The contract is filed in 1 state.
- Death Benefit
- Return of current contract value (interest earned added to purchase payment, minus prior withdrawals) at the annuitant's death
- Minimum Guaranteed Surrender Value
- 0.50% guaranteed minimum floor rate (2.55% in New York)
- RMD Treatment
- RMD-friendly: surrender charges waived on IRS required minimum distributions.
- Withdrawal Provisions
- Required minimum distribution amounts, death benefit distributions, and annuitization distributions are not subject to CDSC or MVA. A 10% early withdrawal federal tax penalty may apply if withdrawn before age 59 1/2.
- Waiver Riders
- Nursing Home and Terminal Illness Waivers (no additional cost; maximum eligibility age 80; not available in CA or NY)