How Much Does a Fixed Annuity Cost in 2026?

This guide walks through every cost component buyers should know about: minimum premium, surrender charges, commission structure, optional rider fees, and the hidden costs unique to fixed and indexed annuities.

Do Fixed Annuities Have Fees in 2026?

No, traditional fixed annuities and Multi-Year Guaranteed Annuities (MYGAs) do not charge explicit fees. There is no annual contract fee, no asset management fee, and no mortality & expense (M&E) charge. The interest rate you are quoted is the net rate you actually receive, every year, for the entire guarantee period.

This is the single biggest difference between fixed annuities and variable annuities. A variable annuity can carry 2% to 3.5% in annual internal fees once you stack M&E charges, fund expenses, and rider costs. A 5-year MYGA paying 5.50% pays 5.50%. There is no fee drag.

The one exception is optional income riders on fixed index annuities (FIAs), which are a different product category. We cover those separately below.

How Much Money Do You Need to Buy a Fixed Annuity?

Most fixed annuity carriers require a minimum premium of $10,000 to $25,000. A handful of carriers accept as little as $5,000. On the high end, some MYGAs require $100,000 or more in exchange for a premium-bonus rate tier.

Deposits above the standard maximum require carrier underwriting approval but are routinely accepted for buyers funding a retirement account rollover. Compare current fixed annuity rates to see today’s minimums and yields side by side.

How Are Agents Paid? (And Does It Cost You?)

Independent agents earn a commission directly from the insurance company, paid as a percentage of the premium you deposit. You do not pay this commission out of pocket. It does not come out of your account value, and it is not added to your premium.

Typical fixed annuity commissions in 2026 fall in this range:

• 3-year MYGA: 1.0% to 1.5% of premium
• 5-year MYGA: 2.0% to 2.75% of premium
• 7-year MYGA: 2.75% to 3.5% of premium
• 10-year MYGA: 3.5% to 5.0% of premium
• Fixed Index Annuity (FIA): 5% to 7% of premium

If you deposit $100,000 into a 5-year MYGA, the carrier pays your agent roughly $2,000 to $2,750. Your account balance starts at $100,000, earns the quoted rate from day one, and matures at the full guaranteed value. The commission is funded from the insurer’s investment spread, not from your deposit.

The trade-off shows up only if you surrender early. Surrender charges allow the insurer to recover the commission it already paid if you exit before maturity. See how annuity surrender charges work for the full mechanics.

What Is the Actual “Cost” of a Fixed Annuity?

If there are no fees, where does the insurer make its money? The answer is the investment spread. When you deposit $100,000 into a 5-year MYGA paying 5.50%, the insurer invests that money in a portfolio of investment-grade corporate bonds, structured securities, and private credit that earns roughly 6.5% to 7%. The insurer pockets the 1% to 1.5% spread to cover overhead, commissions, reserves, and profit.

This is the fundamental “cost” of any fixed annuity: the gap between what your money could theoretically earn on its own and what the carrier credits to your account. For comparison:

• A 5-year Treasury bond in May 2026 yields roughly 4.2%
• A top-rated 5-year MYGA in May 2026 yields roughly 5.5%
• A 5-year FDIC-insured bank CD in May 2026 yields roughly 4.4%

The MYGA actually delivers a higher net yield than either alternative because insurers invest in longer-duration assets with modestly more credit risk and pass most of that excess yield through to the policyholder. The “cost” of using an annuity instead of going directly to the bond market is paid by the spread, but the consumer outcome is typically a higher net yield.

Do Fixed Index Annuities Cost More Than Fixed Annuities?

Yes, in two ways. First, fixed index annuities (FIAs) have no explicit annual fee on the base contract, but they cap your participation in the underlying index, the cap or participation rate is effectively the “price” of having principal protection. Second, FIAs with optional income riders charge an annual rider fee, typically 0.95% to 1.25% of the income value, deducted each year from the account value.

For an FIA buyer who wants the lifetime income guarantee, that 1% rider fee is the cost of buying a personal pension. For an FIA buyer who only wants index-linked growth without lifetime income, decline the rider and your only “cost” is the cap or participation limit on your index credits. See our fixed index annuity guide for product-level detail.

Fixed Annuity Prices vs. CDs vs. Variable Annuities

To make the cost question concrete, here is how the three most common safe-money options compare in May 2026.

The MYGA is the lowest-cost annuity product available. On a pure fee-versus-yield basis, it dominates CDs and variable annuities for any buyer who can commit the money for the full term. Compare current MYGA rates against today’s top CDs in one view.

Hidden Costs to Watch For

Fixed annuities are among the most transparent retirement income products available, but a few cost-adjacent items occasionally surprise buyers.

• Surrender charges. If you withdraw more than the free withdrawal amount (typically 10% per year) during the surrender period, you will pay a declining percentage penalty. A 5-year MYGA might charge 7% in year 1, dropping to 1% in year 5. This is not a fee, but it is a real cost if your plans change. Read the full surrender charge guide.
• Market value adjustment (MVA). Many MYGAs include an MVA clause that adjusts your surrender value based on interest rate changes. If rates have risen since you bought, an early surrender will cost more; if rates have fallen, the MVA can actually increase your payout. See market value adjustment for details.
• Premium taxes. A handful of states (California, Nevada, Maine, South Dakota, West Virginia, Wyoming) charge a small premium tax on annuity purchases, typically 0.5% to 3.5%, paid out of the carrier’s pocket but sometimes affecting the rate offered.
• Income rider fees. Optional only. Common on FIAs, almost never on MYGAs. Decline the rider if you do not need lifetime income.
• Ordinary income tax on gains. Annuity earnings grow tax-deferred but are taxed at ordinary income rates on withdrawal, not the lower capital gains rate. This is the largest “hidden cost” for non-qualified annuity buyers in high tax brackets.

How Much Income Does a $100,000 Fixed Annuity Buy?

Cost is one side of the equation; income is the other. Here is what a $100,000 premium produces across the most common fixed annuity types, based on May 2026 rates for a 65-year-old buyer.

• 5-Year MYGA at 5.50%: $5,500 per year in interest. After 5 years, $130,696 total account value (compounded).
• 10-Year MYGA at 5.40%: $5,400 per year in interest. After 10 years, $169,103 total account value.
• Lifetime SPIA, single life, age 65: Approximately $7,800 per year for life (roughly 7.8% payout rate).
• FIA with income rider, deferred 5 years to age 70: Approximately $7,200 to $8,500 per year for life starting at age 70.

Use our annuity calculators to model your own scenario with real carrier numbers.

Are Fixed Annuities Worth the Cost?

For most buyers seeking guaranteed yield with no market risk and no annual fee, fixed annuities offer the cleanest cost structure of any retirement income product. A 5-year MYGA paying 5.50% net of all fees delivers a guaranteed yield that is hard to match anywhere else in the safe-money space, especially with a similar guarantee period.

The honest answer to “what does a fixed annuity cost” is: nothing you can see, and a spread you cannot. The relevant question for buyers is not “what does it cost,” but “what does it net pay me compared to my alternatives.” On that metric, top-rated MYGAs in 2026 win against CDs, Treasuries, and money market funds across almost every term length.

MyAnnuityStore has placed over $1 billion in annuities, the majority of them MYGAs purchased specifically because of the zero-fee structure and competitive net yield. Compare today’s rates from 90+ top annuity companies and request a quote without committing.

Frequently Asked Questions

How much does a fixed annuity cost per year?

A traditional fixed annuity (MYGA) costs zero per year in explicit fees. There is no annual contract fee, no management fee, and no mortality & expense charge. The quoted interest rate is the net rate you receive. Fixed index annuities with optional income riders are the exception, charging roughly 0.95% to 1.25% per year on the income value.

What is the minimum to buy a fixed annuity?

Most carriers require $10,000 to $25,000 as a minimum premium. A few accept as little as $5,000. Maximum premiums without underwriting approval typically range from $500,000 to $1,500,000 depending on the carrier.

Are there commissions on fixed annuities?

Yes, but you do not pay them directly. The insurance company pays the agent a commission of 1% to 5% of premium, depending on product type and term length. This is paid from the insurer’s investment spread, not deducted from your deposit.

Why is a fixed annuity cheaper than a variable annuity?

Fixed annuities invest in a general fund of bonds and credit assets managed by the insurer, with no individual subaccount management, no investment options to select, and no mortality & expense risk to insure against. Variable annuities have all of those elements plus separate-account fund expenses, which is why their all-in cost typically runs 2% to 3.5% per year.

Do fixed annuities have hidden fees?

Not in the traditional sense. The closest things to hidden costs are surrender charges (only if you withdraw early), market value adjustments (only on surrender), and ordinary income tax on gains (not a fee, but a real cost on non-qualified contracts). The headline interest rate is what you actually earn.

Sources and Further Reading:

• NAIC: Annuities Topic Overview
• FINRA: Annuities Investor Education
• Insurance Information Institute: Annuities Consumer Guide