Highest Rated
5.45%
Current Rate (APY)
Get a Quote →Compare Today’s Best 3 Year Annuity Rates
Rates subject to change without notice. Availability & features vary by state and insurer. Guarantees are backed by the claims‑paying ability of the issuing insurance company. Not a bank product. Not FDIC insured. State guaranty association limits apply (vary by state). Logos are property of their respective insurers; shown for educational platform availability only and do not imply endorsement.
Consider These Key Features
- Availability in your home state (the issuing insurer must be licensed in the owner’s home state to sell the annuity to you).
- Guaranteed interest rate (typically compounded; the rate can vary by your home state and by your purchase amount).
- Issuer (carrier) rating (the AM Best rating reflects the insurer’s financial strength; lower-rated insurers often offer higher rates).
- Product term (1 to 10 (sometimes up to 20) years earning the guaranteed rate; the term also matches the surrender-charge period).
- Penalty-free withdrawals (interest only, a set percentage of account value, or none; for the same product, adding free withdrawals usually lowers the rate).
What Is a 3-Year Fixed Annuity?
A 3-year fixed annuity is an insurance contract that guarantees a fixed interest rate for three years. You pay a lump-sum premium, the insurer credits a locked rate, and at the end of the term you can withdraw the money, renew into a new contract, roll into another annuity tax-free via a 1035 exchange, or annuitize for income.
Because the term is short, a 3-year MYGA is the closest annuity equivalent to a 3-year bank CD. The difference: the rate is usually higher, growth is tax-deferred, and the contract is issued by a life insurance carrier rather than a bank.
A 3-year fixed annuity typically includes:
- A guaranteed interest rate for the full 36 months
- Principal protection from market losses
- Tax-deferred growth (no 1099-INT each year)
- 10% annual penalty-free withdrawal provision on most contracts
- Surrender charges if you exit before month 36
- A renewal rate or contract maturity options at the end of year 3
Fixed Annuity Rates vs CD Rates
Fixed annuities and CDs both provide a guaranteed interest rate while protecting your principal from market fluctuations. On rate alone, fixed deferred annuity rates have generally paid 1.0% to 1.75% more than top CDs at the same term over the last 24 months.
However, fixed annuities are designed for long-term savings goals (like retirement) and their growth is tax-deferred, whereas CDs are typically for short or intermediate goals and their interest is subject to income tax each year.
On a $100,000 deposit, today’s best 3-year fixed annuity at 5.65% grows to about $117,926, versus $113,137 for a 4.20% 3-year CD. That is roughly $4,789 more in interest over 3 years.
| Term | MYGA Rate | Top CD Rate | Tax-Equivalent Yield* |
Annuity | CD | Annuity Edge |
|---|---|---|---|---|---|---|
| 2-Year | 5.15% CL Life | 4.30% National Best | 6.78% | $110,565 | $108,785 | +$1,780 |
| 3-Year | 5.65% Farmers Life Insurance Company | 4.20% National Best | 7.43% | $117,926 | $113,137 | +$4,789 |
| 4-Year | 5.30% Oceanview Life and Annuity | 4.10% National Best | 6.97% | $122,946 | $117,436 | +$5,509 |
| 5-Year | 6.30%SI Knighthead Life | 4.25% National Best | 8.29% | $131,500 | $123,135 | +$8,365 |
*Tax-Equivalent Yield shows the pre-tax CD rate a saver in the 24% federal bracket would need to match the annuity rate on a tax-deferred basis (formula: annuity rate ÷ (1 − bracket)). Actual after-tax results depend on your full tax situation, state tax, and timing of withdrawals.
Sources: Annuity rates: June 22, 2026 · AnnuityRateWatch. CD rates: May 1, 2026 · Bankrate.com. Annuity values use compound interest at the stated rate; products marked SI use simple interest. Rates subject to change without notice. Availability & features vary by state and insurer. Guarantees are backed by the claims‑paying ability of the issuing insurance company. Not a bank product. Not FDIC insured. State guaranty association limits apply (vary by state).
A 3-year MYGA may be a better fit if you:
- Want tax-deferred growth on retirement dollars
- Can leave the money untouched for 36 months
- Are over age 59½ (or comfortable waiting until then to withdraw)
- Want a higher guaranteed rate than a bank offers
A 3-year CD may be a better fit if you:
- May need the money before the term ends
- Are under age 59½ and may need early access
- Prefer FDIC insurance and a bank relationship
- Are in a low or zero tax bracket
For a full breakdown, see our fixed annuity vs CD comparison guide or run your numbers through our CD vs annuity calculator.
What Happens When the 3-Year Term Ends?
About 30 to 60 days before the contract matures, the carrier sends a maturity notice listing your options. You typically have a 30-day window (some carriers 10-day) to make a decision. If you do nothing, most contracts auto-renew at the carrier’s current renewal rate, which is rarely the best available rate on the market.
Before that window closes, compare three things:
- The carrier’s renewal rate offer
- Current best-available 3-year, 5-year, and 7-year rates on the open market
- Your own need for liquidity versus another lock-in
If a different carrier offers a better rate, a 1035 exchange moves the money tax-free. We handle that paperwork for clients at no cost.
What Affects Fixed Annuity Rates?
Rates are driven by a mix of market conditions, insurer strategy, and product design. The factors below explain why one contract pays 6.50% while another pays 5.20% on the same term.
- Interest rates and Treasury yields. Insurers invest premiums in bonds, so when yields rise, annuity rates rise.
- Contract term length. Longer terms usually pay more, but lock you in longer.
- Insurer pricing strategy. Some carriers compete aggressively on rate; others offer slightly lower yields with stronger ratings.
- Financial strength and risk profile. Lower-rated carriers often lead the rate tables.
- State availability. A contract offered in Florida may not be approved in New York.
- Premium amount. Deposits of $100,000+ typically earn higher tier rates.
- Optional features and liquidity. Enhanced free withdrawals and riders trade base rate for flexibility.
How to Buy a 3-Year Fixed Annuity
The process takes 15 to 30 minutes and looks roughly the same at every carrier:
- Step 1: Compare live rates. Use the table above or request a personalized rate report with your state, age, and deposit amount.
- Step 2: Review carrier financials. Check AM Best, S&P, and Moody’s ratings. We recommend A- or better.
- Step 3: Complete the application. Most carriers offer e-application. You will need ID, beneficiary info, and funding source.
- Step 4: Fund the contract. Transfer from a bank, another annuity (1035), or an IRA rollover.
- Step 5: Free-look period. Every state gives you 10 to 30 days to review the issued contract and cancel penalty-free.
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