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How is the interest rate determined on the unpaid balance?

April 26, 2017Balance Interest rate unpaid

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How is the interest rate determined on the unpaid balance?

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A. The IRS will use the ‘Annual Federal Mid-Term Rate’ (AFMR) to determine what interest rate will be used on the unpaid balance in the Private Annuity Trust. The AFMR rate moves up and down monthly based on credit market fluctuations. Your Annuity contract will use the current AFMR rate for the month in which it was established. This rate will “lock in” and become a fixed rate for the life of your annuity payments.