Let Us Guide You to the Right Annuity
October 15, 2025
Best 5 Year Fixed Annuity Rates
Knighthead Life Insurance Company currently offers the best 5 year fixed annuity rate of 6.45% (applications must be signed by Friday, October 17, to lock-in this current rate).
| Term | Insurer | Review | Annuity | Rate | AM Best | Apply |
|---|---|---|---|---|---|---|
| 5 Years | 
| Knighthead Life | Staysail Annuity | 6.45% Simple | A- | Apply |
| 5 Years | 
| Mountain Life | Alpine Horizon | 6.15% | B+ | Apply |
| 5 Years | 
| Revol One | DirectGrowth | 6.00% | B++ | Apply |
| 5 Years | 
| Farmers Life | Safeguard Plus | 5.75% | B++ | Apply |
“Rates shown are for informational purposes only and subject to change before contract issue. Guarantees are backed by the claims-paying ability of the issuing insurer. State variations may apply.”
NOTE: Click on the Insurance Company’s name to read their full review or the Annuity product name for more details and information,
Compare More 5 Year Fixed Annuity Rates
| Company Name | Annuity Name | Fixed Rate (%) | Guaranteed Years | Free w/d Yr 1 | Free w/d Yrs 2+ |
|---|
Fixed Annuity Calculator
You can use this annuity calculator to see how much your investment will earn each year and it’s projected value at muturity. You just need to enter:
- Investment amount
- Interest rate from the live rates table above
- Annuity term (number of years)
- Select how often interest compounds (we suggest annual if you are unsure)
Fixed Annuity • Flexible Compounding
Initial premium (before taxes/fees).
Please enter an amount greater than 0.
Annual nominal rate. APY varies with compounding.
Please enter a rate between 0% and 20%.
Guaranteed period (typical MYGA terms are 2–10 years).
Please enter a whole number of years between 1 and 20.
Many MYGAs credit annually; others shown for comparison.
Educational tool. Contract crediting, MVAs, and surrender charges vary by carrier. Request a carrier illustration for exact figures.
Projected Maturity Value
$0
Total Interest
$0
Effective APY
0.00%
Enter your numbers to see the projection. APY reflects your compounding choice and interest treatment.
Year-by-Year Earnings
Breakdown updates as you type.
| Year | Start Balance | Interest Earned | End Balance |
|---|---|---|---|
| Enter values to see the schedule. | |||
Featured 5 Year Fixed Annuity of the Week
Wichita National Life Insurance Company has a 5 year fixed annuity rate of 6.25% compounding; click the image below to download the product brochure.
Compare Fixed Annuity Rates by Term
| Term | Insurer | Company | Annuity | Rate | AM Best | Free withdrawals | Application |
|---|---|---|---|---|---|---|---|
| 2 Years | 
| CL Life | CL Sundance | 5.25% | B++ | Interest Only | Apply |
| 3 Years |
| Mountain Life | Alpine Horizon | 6.00% | B+ | 10% | Apply |
| 4 Years |
| Mountain Life | Alpine Horizon | 6.05% | B+ | 10% | Apply |
| 5 Years |
| Knighthead Life | Staysail Annuity | 6.45% Simple | A- | None | Apply |
| 6 Years | 
| Equitrust | Certainty Select | 5.60% | B++ | Interest Only | Apply |
| 7 Years |
| Knighthead Life | Staysail Annuity | 6.65% Simple | A- | None | Apply |
| 8 Years |
| EquiTrust | Certainty Select | 5.65% | B++ | Interest Only | Apply |
| 9 Years | 
| Clear Spring Life | Preserve MYGA | 5.35% | A- | None Yr 1 10% Yrs. 2-9 | Apply |
| 10 Years |
| Revol One | DirectGrowth MYGA | 6.00% | B++ | None | Apply |
*NOTE: Click on the insurance company or the annuities name for more details. You can find the best rates for fixed index annuities here; if you are looking for them instead. Shop all fixed annuity rates.
How Do 5 Year Fixed Annuities Work?
- Accumulation phase:
You pay premiums to the insurance company, and the money grows at a guaranteed interest rate. The interest is tax-deferred, meaning you don’t pay taxes on the earnings until you withdraw them.
- Annuitization (payout) phase:
After the 5 year accumulation period, you can receive a series of fixed, predictable payments. Or, you can take your account value in a lump sum, renew your annuity for another 5 year term at the current interest rates, or 1035 exchange your annuity tax free to a different annuity companyl
Key Features:
- Guaranteed return: Provides a fixed rate of return with principal protection, unaffected by market fluctuations.
- Tax-deferred growth: Earnings are not taxed until you withdraw them.
- Predictable income: Offers a guaranteed income stream for retirement.
- Liquidity: Can be less liquid than other options due to surrender charges for early withdrawals.
- Surrender charges: You may face penalties for withdrawing more than a small percentage of your money before the surrender period ends.
- Inflation risk: A fixed rate of return may not keep pace with inflation, especially over the long term.
Annuity Comparison Guide
Below are some key considerations for purchasing a fixed annuity.
| Term | Why It Matters |
|---|---|
| Surrender Charge | Shows the cost of bailing out early. Helps you avoid tying up funds you might need. |
| Free Withdrawal Amount | Your built‑in annual liquidity (often 10%). Lets you plan access without penalties. |
| Fixed (MYGA) Annuity | Simple guaranteed rate—often beats CDs. Useful for safe growth over a set term. |
| Fixed Indexed Annuity (FIA) | Upside linked to an index with zero market‑loss risk. Conservative growth tool. |
| Income Rider | Adds a future lifetime paycheck (usually a fee). Builds retirement income certainty. |
| Annuitization | Turns value into guaranteed payments you can’t outlive—addresses longevity risk. |
| Return of Premium (ROP) | Gives an exit option: reclaim at least what you put in (may trade off some growth). |
| 1035 Exchange | Lets you upgrade an old contract tax‑deferred. Avoids triggering current taxation. |
| Carrier Rating | Measures insurer strength. Guarantees are only as solid as the issuing company. |
| Tax‑Deferred Growth | Delays taxes so earnings can compound faster—boosts long‑term accumulation. |
Fixed Annuities vs CD Calculator
Compare today’s fixed (multi‑year guaranteed) annuities with bank CDs. Both protect principal and offer a guaranteed rate, but taxation, liquidity provisions, beneficiary treatment, and long‑term accumulation potential differ. Use the quick matrix below, then run the mini calculator to see the after‑tax impact of tax deferral.
Important Assumptions & Disclosures
- CD interest assumed taxable annually at the entered marginal rate (simplified).
- Annuity interest assumed to compound tax‑deferred; tax applied to the gain at end of horizon at same marginal rate (simplified—real-world distributions may vary).
- No early surrender charges, withdrawal penalties, RMDs, or state premium taxes modeled.
- This is educational, not individualized tax, legal, or investment advice. Verify current rates and product features.
Types of Annuity Rates
Multi-Year Guaranteed Annuity (MYGA)
Multi-Year Guaranteed Annuities (MYGA) pay a set interest rate for the length of your contract. Most annuities provide some liquidity but not all; so that is something to keep in mind.
Variable Annuities
Variable annuities provide an opportunity to invest your contributions in various sub-accounts tied to the performance of the stock market. This flexibility allows for potentially higher returns, but it also comes with increased risk.
Single Premium Immediate Annuity
As the name suggests, a single premium immediate annuity provides a steady stream of income shortly after an investor purchases a contract, usually within 30 days, and always within 13 months.
Traditional Fixed Annuity Rates
Traditional fixed annuity rates do not guarantee a set interest rate for the entire length of the annuity contract. The first years rate is specified and a new rate is set on each anniversary.
Fixed Index Annuity Rates
Fixed index annuity rates combine elements of both fixed and variable annuities. They offer a minimum guaranteed interest rate, similar to fixed annuities, but also provide the potential for additional earnings based on the performance of a stock market index.
What Determines the Rate for Annuities?
5 year fixed annuity rates are determined by current interest rates, insurer investments, and competition. Understanding these factors helps you shop for the best rate for your retirement savings.
- Interest rate environment
- Core driver: treasury and corporate bond yields.
- When interest rates rise, insurers can credit higher fixed annuity rates. When rates fall, new‑business rates usually decline.
- Economic growth and inflation
- Strong growth and higher inflation expectations generally push interest rates up, which can lift fixed annuity rates.
- Even in volatile markets, fixed annuities provide contractual guarantees that protect principal and lock in a guaranteed rate for the term.
- Insurer portfolio and risk management
- Carriers invest premiums in high‑quality bonds and other fixed‑income assets. Portfolio yield and duration shape what rates they can offer.
- More conservative portfolios may post slightly lower rates but greater stability; more aggressive allocations might support higher rates with more variability at renewal.
- Company strength and competition
- Financially strong insurers (higher credit ratings) tend to offer more competitive, sustainable fixed annuity rates.
- Competitive markets and sales goals also influence pricing; carriers often adjust new‑business rates weekly or monthly.
What this means for you
- Compare by term and yield backdrop: longer terms often pay more when bond yields are elevated.
- Check insurer ratings and liquidity features (10% free withdrawals, MVA, surrender schedule).
- Revisit rates at renewal: your initial guaranteed rate is locked for the term; afterward, you can shop and 1035 exchange if better fixed annuity rates are available.
How are Fixed Annuities Taxed?
The interest you earn in an annuity grows tax-deferred, which means you don’t have to pay taxes on the interest your annuity earns until you make a withdrawal from your annuity. Generally, earnings from annuities are taxed at your ordinary income tax rate using the LIFO (last in, first out) method.
Ultimately, how your annuity earnings will be taxed depends on the type of funds you use to purchase the annuity.
Below is an example showing how tax deferral could increase your earning power. Consider someone whose Federal Tax bracket is 32% who owns an annuity that earns 4.50%. To match those same earnings in a taxable investment, they would have to earn 6.62% instead.
Under current law, annuities grow tax-deferred. An annuity is not required for tax deferral in qualified plans. Annuities may be subject to taxation during the income or withdrawal phase. Neither My Annuity Store, Inc. nor any financial professionals acting on its behalf should be viewed as providing legal, tax, or investment advice. You should be advised to rely on your qualified tax professional.
Top Fixed Annuity Companies (2024–2025 Sales Leaders)
The table below lists the top 10 Annuity Companies for 2024 based on total U.S. Individual fixed annuity sales. To learn more about these companies, visit our annuity company directory. the best fixed annuity companies in 2024 were:
- Athene
- Mass Mutual
- Corebridge
- New York Life
| Rank | Insurance Company | 2024 Fixed Annuity Sales |
|---|---|---|
| 1 | Athene Annuity & Life | 21,155,879 |
| 2 | Massachusetts Mutual Life | 16,071,784 |
| 3 | Corebridge Financial | 13,043,253 |
| 4 | New York Life | 9,460,746 |
| 5 | Global Atlantic Financial Group | 7,605,065 |
| 6 | Fidelity & Guaranty Life | 5,052,034 |
| 7 | American National Insurance | 4,782,840 |
| 8 | Western Southern Group | 4,771,770 |
| 9 | Delaware Life | 4,736,445 |
| 10 | Reliance Standard Life Insurance | 4,021,995 |
| Top 20 | $120,551,930 | |
| Total industry | $153,200,000 | |
| Top 20 share | 79% |
Where Can You Buy Annuities?
There are various avenues through which you can buy annuities.
- Insurance Companies and Financial Institutions
- Independent Financial Advisors
- Online Annuity Marketplaces. Online annuity marketplaces.
When a Fixed Annuity Could Make Sense (Use Case Comparison)
Explore common scenarios where a fixed annuity may be considered versus doing nothing, buying a CD, or using other fixed‑income instruments. A fixed annuity—also called a Multi‑Year Guaranteed Annuity (MYGA)—offers a guaranteed rate for a set term. Expand each panel for: the situation, why a fixed annuity might fit, alternatives, and key evaluation cautions.
Situation
Current CDs are maturing and future short‑term rates might fall; desire to lock multi‑year yield while keeping staged liquidity.Why Fixed Annuity Might Fit
Fixed annuities may offer higher multi‑year guaranteed rates versus new CDs at 3–7 years; tax deferral can enhance effective after‑tax yield in a taxable account.Alternatives
New CD ladder, Treasury ladder, short/intermediate bond funds, high‑yield savings (variable), fixed indexed annuity w/ fixed declared rate.Cautions / Evaluate
Surrender schedule vs desired liquidity. Rate hold/transfer timing. Insurer rating diversification. Compare net after‑tax vs CD after annual tax.Situation
Large balances in CDs / savings produce 1099‑INT each year; marginal tax rate erodes compounding.Why Fixed Annuity Might Fit
A fixed annuity defers taxation until distribution; more principal compounding pre‑tax may result in higher after‑tax accumulation over identical nominal rates.Alternatives
Municipal bonds (credit risk), deferred fixed indexed annuity, EE/I Bonds (limits), structured CDs (complexity).Cautions
Tax deferral ≠ elimination; eventual ordinary income. Potential 10% IRS penalty on taxable gains if prior to age 59½ (non‑qualified). Keep emergency liquidity outside.Situation
Funds earmarked to cover expenses until Social Security or pension start; need predictability.Why Fixed Annuity Might Fit
Guaranteed multi‑year growth creates a dedicated “future income bucket” insulated from market sequence risk.Alternatives
Short bond ladder, TIPS ladder, fixed indexed annuity w/ limited volatility, stable value inside plan.Cautions
Ensure maturity aligns with income need date. Avoid overcommitting; maintain liquid reserves for unexpected expenses.Situation
Investor rolled from a 401(k) and wants to park a portion safely while designing a diversified allocation.Why Fixed Annuity Might Fit
Provides a guaranteed anchor segment; reduces need to liquidate equities during initial downturn period.Alternatives
Stable value fund (if available), short‑term Treasury ladder, money market sweep, fixed indexed annuity with no fee.Cautions
Compare internal yields vs stable value. IRA RMD timing—ensure liquidity once RMDs begin. Monitor insurer ratings.Situation
Existing fixed annuity is crediting a minimum guaranteed rate below current market fixed annuity offerings.Why Fixed Annuity Might Fit
A 1035 exchange can lock a higher guaranteed rate without current taxation, potentially improving future accumulation.Alternatives
Keep existing contract (if surrender nearly over), fixed indexed annuity, partial 1035, or diversify into ladder.Cautions
Surrender charge balance, loss of legacy riders, new surrender clock resets, suitability of replacement. Document comparison.Situation
Approaching / just entered retirement; fear of needing to liquidate equities in a downturn to fund income.Why Fixed Annuity Might Fit
Provides a guaranteed “income bridge” bucket, allowing risk assets time to recover before drawing them.Alternatives
Cash ladder, short Treasury ladder, buffered annuity (with risk), fixed indexed annuity with cap/participation potential.Cautions
Assess portion vs inflation risk (fixed nominal). Plan ladder maturities to refill income needs sequentially.Situation
Expectation that prevailing fixed income yields may drop within the next rate cycle.Why Fixed Annuity Might Fit
Multi‑year guarantee locks a rate beyond typical short CD windows; shields from near‑term reinvestment risk if cuts occur.Alternatives
Longer‑term CDs, Treasuries (duration / market price volatility), fixed indexed annuity declared rate strategy.Cautions
If rates rise instead, funds are committed unless surrendering (charges). Ladder to mitigate rate direction uncertainty.Situation
Assets currently in single‑name accounts without POD/TOD designations; heirs want simplicity.Why Fixed Annuity Might Fit
Direct beneficiary designations can bypass probate and accelerate claim settlement versus estate process.Alternatives
Add TOD/POD to CDs, revocable trust titling, transfer‑on‑death brokerage with short‑term instruments.Cautions
Beneficiaries must keep updated. Death proceeds still taxable on gain (ordinary income). Consider overall estate plan cohesion.Situation
Lump sum awaiting a structured long‑term plan; desire to avoid rushed investment risk.Why Fixed Annuity Might Fit
Offers guaranteed accumulation while comprehensive plan & tax strategy (e.g., staged Roth conversions) is finalized.Alternatives
T‑bill ladder, high‑yield savings (variable), short muni ladder (if tax bracket warrants), partial DCA into portfolio.Cautions
Avoid locking too large a share for too long. Analyze liquidity for near‑term tax payments or capital deployment needs.Situation
Intend to perform annual Roth conversions; want stable value for amounts earmarked to convert.Why Fixed Annuity Might Fit
Ensures the pre‑conversion asset value isn’t whipsawed by markets, helping precisely size each year’s taxable conversion.Alternatives
Treasury ladder, high‑grade short bond fund, money market (variable reinvestment risk).Cautions
Ensure term doesn’t extend beyond the conversion schedule. Consider opportunity cost if equities rally sharply during holding period.This educational comparison is hypothetical and not personalized advice. Fixed annuities are long‑term insurance products with surrender periods and possible market value adjustments (if applicable). Withdrawals of taxable gains before age 59½ (non‑qualified) may incur a 10% IRS penalty. Rates, features, free withdrawal provisions, and carrier financial strength vary; guarantees rely on the insurer’s claims‑paying ability. State guaranty association coverage differs from and is not a substitute for FDIC insurance. Evaluate liquidity needs, tax implications, and suitability prior to purchase.
5 Year Fixed Annuity Rates FAQs
What is a 5-year fixed annuity?
A 5-year fixed annuity is an insurance contract that guarantees a fixed interest rate for five years. Your principal is protected by the insurer and your interest grows tax-deferred. At the end of the 5-year term, you can renew, transfer to another annuity, or withdraw per the contract.
How are 5-year fixed annuity rates determined?
Rates are set by the issuing insurance company and reflect prevailing interest rates, the insurer’s general account yields, and competitive market conditions. When interest rates rise or fall, 5-year MYGA rates typically move in the same direction.
Are 5-year fixed annuities safe?
They’re considered low risk. Your guarantees are backed by the claims-paying ability of the issuing insurance company. State guaranty association coverage may apply up to certain limits, which vary by state. Fixed annuities are not FDIC insured or bank products.
What is the difference between a 5-year fixed annuity and a CD?
Both offer a guaranteed rate, but fixed annuity interest grows tax-deferred until you withdraw, while CDs are typically taxed annually. Annuities may offer flexible income and beneficiary features. CDs are FDIC insured (up to limits); annuities rely on insurer strength and state guaranty associations
Can I withdraw money during the 5-year term?
Most contracts allow 10% penalty-free withdrawals each year, but amounts above that may incur surrender charges and potentially a market value adjustment (MVA). Review your contract for specific liquidity provisions.
What happens at the end of 5 years?
You’ll have a window—often 30 days—to renew, exchange to another annuity, annuitize for income, or withdraw funds. If you do nothing, many carriers automatically renew you to a new guarantee period. Always review your renewal notice.
How are taxes handled?
Interest grows tax-deferred. Withdrawals are taxed as ordinary income and may be subject to a 10% IRS penalty if taken before age 59½. Non-qualified funds, IRAs, and Roth IRAs each have different tax treatments—consult a tax advisor.
Are there fees in a 5-year fixed annuity?
There are typically no explicit annual fees; costs are priced into the credited rate. However, surrender charges can apply if you withdraw more than your free amount during the term.
What is a Market Value Adjustment (MVA)?
An MVA can adjust your surrender value up or down if you take excess withdrawals during the term, based on interest rate movements since purchase. If rates rose, the MVA may reduce value; if rates fell, it may increase value.
Can I ladder 5-year fixed annuities?
Yes. Laddering 3-, 5-, and 7-year MYGAs can diversify rate risk and create periodic liquidity. As each rung matures, you can reinvest at current rates or use the funds for income. Try our annuity ladder guide and calculator.
How do I compare carriers for a 5-year annuity?
Compare the guaranteed rate and compounding method, carrier financial strength ratings, liquidity features, presence of MVA, surrender schedule, renewal options, and issue ages/premium limits. A side-by-side rate sheet helps weigh trade-offs.
How fast can I open and fund a 5-year fixed annuity?
E-apps often take 10–20 minutes. Transfers or rollovers usually complete in 5–30 business days depending on the delivering institution and where your funds are coming from. Your advisor can track and update you throughout.
Related Reading
Annuity Ladder Strategy 2025: Build Secure Retirement Income
October 13, 2025
Annuity Quiz – Test Your Knowledge
September 13, 2025
How are Annuities Taxed at Withdrawal
August 16, 2025
How Much Does a $500,000 Annuity Pay Per Month?
October 13, 2025
Annuity vs. 401(k): Key Differences Compared
April 21, 2024
Trusted Annuity Insight
Jason has distributed more than $1.5 billion in annuities over his 20 year career. His mission is to democratize access to annuities for all Americans and provide a safe and simple way to purchase an annuity.
Fixed
MYGA
Indexed
Income Planning
