Explore commonly used personal finance terms.
An annuity due is a series of equal payments made at the beginning of each period, such as rent payments made at the start of a month. It differs from an ordinary annuity, where payments are made at the end of each period. Common examples include lease payments and insurance premiums. Annuities due are useful for retirement planning, allowing investors to plan for consistent income at predictable intervals, helping with budgeting. The timing of payments impacts the total interest or growth of the annuity, as payments start compounding earlier.
