When it comes to saving money and building a nest egg, most people don't know where to begin. An annuity is an insurance product that allows you to grow your money tax-deferred in a safe environment. A fixed annuity offers you a fixed interest rate usually higher than a bank and a fixed index annuity allows you to capture upside potential when the stock market goes up with no downside risk if the market goes down. An annuity is designed to keep for many years because there are penalties for early termination, but they offer many liquidity features to withdraw money along the way penalty free as well as giving you the option to take an income stream. An annuity can be a very sound financial planning tool especially for people who want guarantees opposed to risk.