With interest rates at their highest in more than a decade, fixed annuities—the type most directly linked to interest rates—have been selling at a record-setting pace.

As measured by LIMRA’s U.S. Individual Annuity Sales survey, which represents 83% of the market, every fixed annuity product category recorded double-digit or better year-over-year growth in the first quarter.

Specifically, fixed-rate deferred annuities, which offer a fixed annual percentage yield at some future date and often a lump sum payment at the end of the contract, brought in nearly $41 billion in sales during the quarter, a 157% year-over-year jump and a new high. Altogether, sales of these products now account for 44% of the total annuity market in the U.S. In contrast, back in the first quarter of 2020, when interest rates were rock-bottom, sales of fixed deferred annuities represented just 18% of the market.

“Market conditions continue to drive investor demand,” said Todd Giesing, assistant vice president of LIMRA Annuity Research, in a press release. LIMRA is the Windsor, Conn.-based industry data tracker.

These strong sales numbers helped push total annuity sales for the quarter to nearly $93 billion, a record that’s 47% higher than in the previous year. LIMRA is forecasting total annuity sales in 2023 to exceed $300 billion for the second consecutive year.

Drilling down deeper, fixed-indexed annuities (FIAs), which essentially track a market index but have a cap on the upside potential in exchange for complete downside protection—you cannot lose money—also had a record-breaking quarter. FIA sales exceeded $23 billion, up 42% from the first quarter of 2022.

“Economic conditions remain favorable for FIA products and this is forecasted to continue throughout the year,” said Giesing in the press release. “LIMRA is predicting FIA sales to grow as much as 10% in 2023 as investors continue to seek out solutions with a balance of protection and growth.”

With income annuities paying out more than most bank CDs, money market accounts, and even many investment-grade bonds, it’s understandable why they had their highest sales quarter ever. Income annuities pay a guaranteed cash flow.

Specifically, sales of deferred income annuities, which allow you to turn on the income stream at a later date, jumped 125% year-over-year to $820 million in the quarter. Similarly, single premium immediate annuities (SPIAs), which are the most straightforward form of annuities, purchased with a large upfront payment and which generate a guaranteed income that can begin immediately, had total sales of $3.3 billion in the first quarter, 120% higher than in the prior year.

Investors, said the LIMRA press release, are looking to lock in high payout rates before the Federal Reserve lowers interest rates again.

The only bad news on annuity sales concerns variable annuities (VAs), which are the closest to mutual funds in that they invest in a portfolio of stocks. Market volatility is considered the cause of a 30% year-over-year decline in quarterly sales of traditional VAs, to just shy of $13 billion. LIMRA forecasts sales for this category to be flat in 2023 as equities remain unreliable.

The one somewhat bright spot in the VA universe are registered index-linked annuities (RILAs), a type of VA that’s structured to credit owners with a high percentage of market gains in exchange for limiting the losses. They are less volatile than traditional VAs and used to be the best-selling category among all annuities.

But in the first quarter of 2023, RILA sales exceeded $10 billion, up 8% from the prior year. LIMRA remains cautiously optimistic about RILAs for the rest of the year, anticipating sales growth of 10% or more. Their “value proposition will continue to attract investors who are seeking a greater return on investment and are willing to accept some of the downside risks,” said the press release.