Term annuities

Term annuities

Challenger Guaranteed Annuity (Fixed Term)

A Challenger term annuity is a secure investment that provides a guaranteed, regular income for a fixed term you choose, regardless of how investment markets perform, and with flexible capital return options at maturity.

Competitive rates

The rate for a Challenger term annuity is fixed for the term of your investment. 

Current annual payments for every $100,000 you invest in the Challenger term annuity are illustrated below. Choose from a term of one year up to 50 years*, with a minimum investment of $10,000. 

Current from 30 November 2020 to 06 December 2020

Term Annual income payment with capital returned at end of term
Years Rate Annual payment amount
2 1.15% $1,150
3 1.30% $1,300
5 1.50% $1,500

With a Challenger term annuity, you can:

  • Enjoy the certainty that your income won’t be impacted by the performance of the share market.
  • Count on regular, known income with guaranteed payments for the term you choose.
  • Invest with the peace of mind that you’ll get your money back at the end of the term or through your regular payments, if that’s what you choose.
  • Keep control over your estate planning by nominating one or more beneficiaries. 

Is it right for me?

A Challenger term annuity might suit you if:

A Challenger term annuity might not suit you if:

You are looking for a low risk investment that is not linked to the performance of the share market.  You have a higher risk appetite and you’re willing to take on more risk for potentially higher returns.

You are looking for a fixed income investment.

You want to invest in the share market or property markets for potential higher long term returns.
You are looking for certainty that you won’t lose money on your investment and you will receive your original investment amount back.  You are willing to take the risk that you may not get your full investment amount back at the end of the investment term.
You are looking for regular, guaranteed income to be paid either monthly, quarterly, half- yearly or yearly.
You don’t need the certainty of known, regular income payments or a known return on investment.
You are happy to lock in a fixed term in exchange for a potentially higher rate.  You will likely need access to your money before the end of the nominated term.
 
Flexibility and features that give you greater control of your investment. With a Challenger term annuity, you can:

Have your investment amount repaid when it suits you

Choose to receive some (or all) of your original investment returned to you as part your regular payments, or at the end of the term. Your regular payments can be paid monthly, quarterly, half-yearly or yearly.

Access your money early, if you need to

If your circumstances change, you can access a lump sum amount. Bear in mind that a Challenger term annuity is designed to be held until the end of the term, so there may be a penalty if you decide to withdraw early.

Enjoy tax-free income for the full term if you invest with super

If you are using your super money to invest in a Challenger term annuity and you are age 60 and over, your regular payments are tax-free. If you invest with non-super money the tax treatment will be different.

Invest for a term that suits you

Choose from a term of one year up to 50 years*, with a minimum investment of $10,000. 

At a glance

The table below shows some of the key differences between a Challenger Term Annuity, a bank term deposit and other products/investments.

This is only a summary of some products available. However, there may be other types of investments that suit your needs that aren’t listed in this table. The information in this table should be regarded as general information only and does not take into account your situation, needs or objectives. A financial adviser can help you decide what type of investment might suit you.

RISK AND RETURN

  Challenger Guaranteed Annuity (Fixed term)
Bank term deposit
High interest savings account

Managed fund

Is the rate fixed for the investment term? Yes. The rate is set at the start of your term. Payments will not change unless you choose to have them increased annually in line with increases in the CPI. Yes. Your interest rate will not go up or down during the term of your investment. No. Your interest rate can go up or down at any time. Introductory interest rates can change after a set period of time. Not applicable. Generally, a managed fund invests in assets such as shares, property, mortgage backed securities, bonds or other investments. The returns are based on the performance of the underlying assets.
Is there potential to lock in a higher interest rate for a longer fixed term? Yes Yes No Not applicable
Are payments guaranteed? Yes. Your payments are guaranteed by Challenger. Yes. Your payments are guaranteed by the bank. Australian Government guarantees deposits up to $250,000 held by banks. No. Savings accounts aren’t designed to make set payments over a term. No. Returns from a managed fund are not always guaranteed. Returns will depend on the performance of the underlying assets.
Is the repayment of the money invested guaranteed? Yes. When held for the term, your total investment amount is guaranteed by Challenger and will be repaid at the end of the term or throughout the term as regular payments, if that’s what you choose. Yes. Your payments are guaranteed by the bank. Australian Government guarantees deposits up to $250,000 held by banks. Yes. Your payments are guaranteed by the bank. Australian Government guarantees deposits up to $250,000 held by banks. No. If the underlying assets perform poorly you can lose some or all of your original investment.
Will payments change if the share market goes down? No. Your payments are fixed for the term and are guaranteed by Challenger, regardless of how share markets perform. No. Your interest payments are fixed for the term and are guaranteed by the bank, regardless of how share markets perform. No. However, interest payments can be affected by changes in the Reserve Bank’s interest rate. Not applicable
 INCOME PAYMENTS
  Challenger Guaranteed Annuity (Fixed term) Bank term deposit High interest savings account Managed fund
Can I choose how often to receive my payments? Yes. You can receive your payments monthly, quarterly, half-yearly or yearly. One year terms have a minimum payment frequency of half-yearly. Generally, yes. You can receive your payments monthly, quarterly, half-yearly or yearly. No. Interest payments are generally made monthly. No. Distributions are generally paid quarterly.
Can I increase the amount of my regular payments? Yes. At the start of your investment, you can choose how the amount invested is repaid to you. You can have it repaid at the end of the term or have it fully or partly repaid to you as part of your regular payments. Once your Annuity starts you cannot change your choice. No. Your payments will be based on the interest rate. You cannot increase the amount of your payments. No Generally, no. Some managed funds may allow you to set up regular withdrawals.
 ACCESS TO MY MONEY
  Challenger Guaranteed Annuity (Fixed term)
Bank term deposit
High interest savings account
Managed fund
Is there a penalty for withdrawing all or part of my money before the end of the term? Yes. The investment is designed to be held to maturity, so there may be a penalty if you withdraw early Usually, yes. You’ll need to check this with the product provider. No. Some accounts may withhold bonus interest if you withdraw within a certain timeframe. Generally, no. There may be restrictions and consequences on redeeming your investment.
Will I get my investment amount back at the end of the term? Yes. Your investment amount will be repaid to you at the end of the term or throughout the term as regular payments, if that’s what you choose. Yes Yes The amount of money you get back at the end of your investment term will depend on the performance of the underlying assets.
 MY INVESTMENT
  Challenger Guaranteed Annuity (Fixed term)  Bank term deposit  High interest savings account  Managed fund
Is there a minimum investment term? Yes. 1 year. Yes. Generally 1 month. No Generally, no
Is the term fixed? Yes. This investment is designed to be held for a term you agree at the start of your investment.
Yes. This investment is designed to be held for a term you agree at the start of your investment. 
No No
Can I add to my investment during the term? No No Yes Generally, yes
Can I re-invest at maturity? Yes Yes Not applicable Not applicable
Is there a minimum investment amount? Yes. The minimum investment is $10,000. Yes. The minimum investment varies from bank to bank. No Yes. The minimum investment varies from
fund to fund.
What happens to my money if I pass away? You can nominate one or more beneficiaries to receive the remaining benefits of your investment. If you invested jointly, the benefits will pass on to the surviving owner. Your money will generally be paid to your estate if you die during the investment term. Your money will generally be paid to your estate if you die during the investment term. Your money will generally be paid to your estate if you die during the investment term.
Are there any fees? No Generally, no. But it’s best to check with the provider. Generally, no. But it’s best to check with the provider. Yes
  Challenger Guaranteed Annuity (Fixed term)
Bank term deposit
High interest savings account
Managed fund

* If you use your super to invest and ask for all of your initial investment to be repaid as part of your regular payments, super rules restrict the maximum term you can select - it cannot be greater than the number of whole years until you turn age 100.

 

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