Rates paid on fixed annuities sold through banks fell sharply through mid-September, to 4.93%.

This continued a slide that began in the summer and represented the first dip below 5% since Rate Watch began monitoring annuity prices in May 1988.

The average rate on Sept. 15 compared with 5.05% in mid-August and 5.13% in mid-July.

Bonus Rate Declined

The average bonus rate paid to new annuity investors slid as well, to 5.69% from 5.9% in mid-August and 6.01% in mid-July.

Annuities are tax-deferred investment products whose rates are primarily tied to the performance of bonds. Rising bond prices have pulled down annuity interest rates.

The declines have dampened investor interest, said John P. Landis, chairman of Comerica Investment Service, the inhouse brokerage of Comerica Bank, Detroit.

"I would say the falling rates have affected annuity sales," Mr. Landis said. "Rates are what draw people to ask about annuities in the first place."

Kenneth Kehrer Associates, Princeton, N.J., calculates the average rates by surveying top annuity companies. Three products had increased rates, 23 had decreased rates, and 14 were unchanged from mid-August to mid-September.

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