When does an immediate annuity with quarterly payments typically start making payments?

An immediate annuity is designed to begin making payments shortly after it is purchased. With an immediate annuity that offers quarterly payments, the first payment typically starts at the end of the first quarter, which is three months after the purchase. This structure provides the annuitant with a steady income stream starting shortly after the investment is made, making it a popular choice for those who seek immediate access to funds, such as retirees.

The timing of the first payment is crucial for this type of annuity, as it is characterized by the immediacy of payment, distinguishing it from deferred annuities, which begin payments at a later date. This makes the understanding of payment timing important when considering the financial planning aspects of annuities.