What are the best annuity rates in Montana today?
The best annuity rates in Montana today top out at 7.10% for a 7-year MYGA from Knighthead Life (AM Best A-, simple interest), as of October 18, 2026. Among carriers rated A, A+ or A++ by AM Best, the top rate is 6.20% for 10 years from Oceanview Life and Annuity. Montana MYGA rates run from 5.25% for 2 years to 7.10%, guaranteed for the full term.
David, 66, lives in Billings and recently moved $150,000 from a maturing CD into a multi-year guaranteed annuity, he wanted the same predictability as a CD but with tax-deferred growth and a higher guaranteed rate. Montana has a moderate top income tax rate of 5.65% for 2026 (reduced from 5.9%), and the state offers a subtraction for taxpayers 65 and older that helps offset the tax bill for qualifying residents.
Rates updated: October 18, 2026, 1:50 pm ET · Source: AnnuityRateWatch. Rates shown are for informational purposes only and subject to change without notice. Products marked SI use simple interest, effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) funds. Always verify current rates with a licensed annuity professional before purchasing.
Key Takeaways
- 5.65% top income tax rate: Montana reduced its top marginal income tax rate from 5.9% to 5.65% for 2026, per the Montana Department of Revenue’s HB 337 income tax notice, a modest improvement, but the state still sits in the mid-range nationally for taxing annuity income.
- Senior subtraction available: Montana repealed its partial pension, annuity, and IRA exemption starting in 2024. Taxpayers 65 and older now get a $5,500 subtraction ($11,000 for joint filers when both spouses are 65+), adjusted annually for inflation.
- Social Security partially taxed: Montana partially taxes Social Security benefits,s depending on total income, which can compound the overall state tax burden for retirees with multiple income sources.
- Guaranty protection up to $250,000: The Montana Life and Health Insurance Guaranty Association covers annuity contracts up to $250,000 per insurer, buyers with larger deposits should spread across multiple top annuity companies.
- No premium tax on annuities: Montana does not charge a premium tax on annuities, so no state premium tax is built into the rates carriers offer in MT.
Montana Commissioner of Securities and Insurance
The Montana Commissioner of Securities and Insurance (CSI) regulates all insurance products in the state, including annuities, and handles consumer complaints and agent licensing. If you have a dispute with a carrier or need to verify an agent’s license, the CSI is your primary resource.
| Contact | Details |
|---|---|
| Agency | Montana Commissioner of Securities and Insurance |
| Consumer helpline | 1-800-332-6148 |
| Website | csi.mt.gov |
| License verification | csi.mt.gov (producer license lookup under “Insurance Licensing”) |
How Montana Taxes Annuity Income
Montana taxes annuity distributions as ordinary income at graduated rates up to 5.65%. The state’s subtraction for residents 65 and older, $5,500 before inflation adjustments, reduces taxable income, but higher earners will still owe a meaningful share.
| Annuity Type | Montana Tax Treatment | State Rate |
|---|---|---|
| MYGA / Fixed Annuity distributions | Taxable; no pension or annuity exemption since 2024 | Up to 5.65% |
| Interest earnings (non-qualified) | Gain portion taxable as ordinary income | Up to 5.65% |
| IRA / 401(k) annuity distributions | Taxable; $5,500 senior subtraction for ages 65+ (inflation-adjusted) | Up to 5.65% |
| Social Security benefits | Partially taxed depending on total income level | Up to 5.65% |
Tips for Buying an Annuity in Montana
- Use tax deferral strategically, given Montana’s rate: At 5.65%, Montana’s state income tax is high enough that deferring gains inside a MYGA has real value. Every year you delay a distribution is a year you’re not writing a check to Helena. If you’re still in your early 60s, a 5- or 7-year MYGA can push taxable income into years when you may be in a lower bracket.
- Check your eligibility for the senior subtraction: Montana’s $5,500 subtraction (for ages 65+, adjusted for inflation) replaced the old pension and annuity exemption in 2024. Confirm with a tax professional how it applies to your return, it can cut hundreds of dollars off your annual Montana tax bill.
- Mind the guaranty association limit: Montana’s state guaranty association protects up to $250,000 per insurer. With $250,000–$500,000 to deploy, a two-carrier strategy keeps every dollar protected. Don’t put $400,000 with a single insurer and assume you’re covered.
- Compare fixed annuity rates across multiple terms: Comparing multiple carriers helps you find the most competitive net yield in MT.
- Know your free-look rights: Montana requires a free-look period on annuity contracts, typically 10 to 30 days, depending on the carrier, during which you can cancel without penalty. Review the full contract, especially the surrender charge schedule, before that window closes. How to Buy an annuity walks you through every step. Request a personalized annuity quote to see today’s best Montana rates from top annuity companies.
Frequently Asked Questions
Does Montana tax annuity income?
Yes. Montana taxes annuity distributions as ordinary income at graduated rates up to 5.65% for 2026. Taxpayers 65 and older can subtract $5,500 ($11,000 for joint filers both 65+), adjusted annually for inflation. Montana repealed its separate pension and annuity exemption in 2024. The deduction is modest, but it helps reduce the effective Montana rate for retirees.
What is the state guaranty association limit in Montana?
The Montana Life and Health Insurance Guaranty Association covers annuity contracts up to $250,000 per insurer. This is the standard limit. If you plan to invest more than $250,000 in annuities, consider using two or more top-rated insurers so each policy stays within the guaranty association limit.
Is a MYGA a smart choice for Montana retirees?
Yes, particularly for those who want guaranteed, predictable growth with no market risk. A MYGA defers income tax until withdrawal, giving Montana retirees control over the timing of their taxable distributions. Paired with the state’s senior subtraction, a well-timed MYGA withdrawal strategy can keep effective Montana tax rates manageable.
Does Montana charge a premium tax on annuities?
No. Montana excludes annuities from its premium tax base, so no state premium tax is built into the rates carriers offer there. Comparing multiple carriers is still the best way for Montana buyers to find the best net yield.
