The rate of return of annuities really depends on what type of annuity you are talking about. Fixed Annuities have a set base rate similar to a CD, they pay a guaranteed rates of interest. If you are looking for a fixed annuity make sure you shop around some companies like Fidelity & Guaranty Life and Guaranty Income Life are raising their base rates. When you are looking at Index Annuities the insurance company gives you a guaranteed minimum interest rate and also a crediting strategy like the S&P 500 or something like that. Think of it this way there are two buckets of money, the first has your money with the guaranteed interest rate, the second has your money linked to the crediting strategy of the market. If the market goes up they will credit that bucket with interest ( every company has different participation rates and caps). If the market is down then that bucket will earn no interest. When ever you want to start drawing an income, the insurance company will see which bucket has the most money and that bucket will be used for income.
If you work with a good broker, they have software that will show you what your investment will look like with all of the companies. Please let me know if I can help in any way.