Article / Updated 03-26-2016
What’s the difference between an annuity and a bond? With an annuity, you don’t expect to ever see your principal back. In return for giving up your principal, you expect a higher rate of return. A cross between an insurance product and an investment, annuities come in myriad shapes and sizes. The general theme is that you give your money to an institution (usually an insurance company or a charity), and that institution promises you a certain rate of return, typically for as long as you live.