Best 3 Year Fixed Annuity Rates 2024

Today's Best 3 Year Fixed Annuity Rates

As of June 1, 2024, the best 3 year fixed annuity rate is 6.00%. The table below compares today’s best 3-year fixed annuity rates. You can view more of today’s highest annuity rates here.

TermAnnuity CompanyInsurer ProfileRateAnnuityAM BestApply Online
3 YearsSecurity Sentinel Life LogoSentinel Security5.90%Security ChoiceB++Apply
3 YearsCL Life Annuity LogoCL Life5.85%CL SundanceB++Apply
3 YearsAspida Annuity LogoAspida5.55%Synergy Choice 3A-Apply
3 YearsFidelity & Guaranty Life Annuity LogoFidelity & Guaranty 5.30%Guarantee Platinum 3A-Apply

You’ll find Fixed Index Annuity Rates here if you’d like to look at them instead.

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Best 3 Year Fixed Annuities

What is a 3 Year Annuity?

A 3-year fixed annuity is essentially a 3-year Certificate of Deposit (CD) issued by an insurance company rather than a bank. Three-year fixed annuities provide a guaranteed interest rate for 3 years.

After the initial 3-year guarantee period you will have the option to either renew for another 3-year period at the new declared interest rate, withdraw your funds, convert your annuity to monthly income payments, or transfer to a new annuity using a tax-free 1035 exchange.

IMPORTANT NOTE: You have likely heard of a fixed annuity referred to as any of these other names:

Illustration of woman with money going into safe and then the money coming out and the woman has aged

Fixed Annuity Definition:

With a fixed annuity, the insurance company guarantees both the rate of return (the interest rate) and the payout to the investor. 

Although the word “fixed” might suggest otherwise, the interest rate on a fixed annuity can change over time.

The fixed annuity contract will explain whether, how, and when this can happen. Three-year fixed annuity rates are fixed for the initial 3-year contract period and a new interest rate is declared at the end of the 3 years.

You’ll have the option to withdraw your funds, transfer to a new investment vehicle or accept the new declared rate.

Source: “Learn to Invest, Investment Types, Annuities, Fixed Annuities.”  Financial Industry Regulatory Authority (FINRA).  Visit FINRA’s Fixed Annuities Webpage

Fixed Annuity vs. CDs

Fixed annuities work very much like a certificate of deposit (CD). Both a fixed annuity and a CD provide principal protection, meaning your account value will not decrease due to market performance.

A fixed annuity, or MYGA, guarantees a set interest rate for a specified period of time – just like a CD.

Fixed Annuity Rates are usually higher than CD rates. However, Fixed annuity guarantees are backed by the claims-paying ability of the issuing insurance company and are not insured by the FDIC like a CD.

While not FDIC-insured, State Guaranty Associations provide a safety net for their state’s annuity policyholders.

Fixed Annuity vs CD Comparison Table

Issued ByInsurance CompaniesBanks
Investment Amount$2,000 - $1,000,000Essentially Any Amount
Investment Term2 years - 10 years3 months - 5 years
Interest Rates (APY)Varies by product.Varies by bank, term and investment amount.
LiquidityUsually, 10% annually or interest earned.Almost always accumulated interest.
GuaranteesBacked by Insurer & State Guaranty Associations.Backed by the FDIC.
Death BenefitMay avoid probate.Probate process required.

Calculating Real Rate of Return for CDs

In 18 of the past 30 years, CDs have had a negative return (after taking into account the impact of taxes and inflation), and in three of the positive years, they earned less than a 1% real rate of return.

Have you considered the impact that taxes on interest may have on your overall rate of return? Generally, the interest received in these CDs may not keep pace with inflation. This could mean lower purchasing power for you over time. 

Here’s a quick way to determine your CD’s real rate of return:

3 step process to calculating real rate of return on a CD

3 Year Fixed Annuity Buyers Guide

Fixed annuities, or Multi-Year Guaranteed Annuities (MYGAs), are the simplest of all annuities making them the easiest variety to shop for and compare. 

However, there are still a few important items to consider when shopping for the best 3-year fixed annuity rates, other than the guaranteed interest rate.


1. Duration: Typically the longer contract you purchase the higher your guaranteed interest rate will be. But that is not the case, especially given the current inverted yield curve.

2. Liquidity: Most all fixed annuities have some type of annual free withdrawals, but the amount available varies by product. You’ll see most of the fixed annuities at our marketplace provide interest-only withdrawals annually. 

Others allow for 10% Free Withdrawals (10% of previous years’ account value) annually.

3. Insurance Company’s Financial Rating: It is very important to consider an annuity company’s financial rating because it is an indicator of its ability to fulfill financial commitments to its policyholders. Usually, a lesser-rated insurance company will offer higher fixed annuity rates, but this is not always true.

How is a Fixed Annuity Taxed?

The deciding factor on how your fixed annuity will ultimately be taxed depends ultimately on the money you used to buy it.

Roth IRA Annuity Taxation

If you purchase a fixed annuity with funds from a Roth individual retirement account (IRA) or Roth 401(k) it is very likely you won’t have to pay federal income tax at all on the money when you withdraw it from your annuity. That includes the principal and interest.

Qualified Annuity Taxation

Qualified funds are monies that you have never paid taxes on such as a traditional IRA or a traditional 401(k). It would be nice if the IRS would allow going from tax-deferred to tax-free but that is not the case.

When you begin to make withdraws from a qualified annuity you will pay normal federal income taxes. Meaning, that 100% of your annuity is treated as ordinary income and 100% of the funds will be taxed when they are taken.

Non-Qualified Annuity Taxation

A non-qualified fixed annuity is an annuity purchased with after tax-dollars such as money from a taxable personal savings or checking account or a personal brokerage account.

When you make a withdrawal from your annuity you pay ordinary income taxes on the gain but not the original deposit amount.

1035 Exchange Banner My Annuity Store, Inc

Can I Exchange My Annuity for a New 3 Year Fixed Annuity?

The Internal Revenue Service (IRS) allows you to exchange an annuity policy that you own for a new annuity policy without paying tax on the investment gains earned on the original contract. 

This can be a substantial benefit. This rule is governed by Section 1035 of the Internal Revenue Code which is why these are called “1035 Exchanges.” Below is a direct link to the complete text of the code.

U.S. Code > Title 26 > Subtitle A > Chapter 1 > Subchapter O > Part III > Section 1035


Advantages of a 1035 Exchange

The primary advantage of using a 1035 exchange to exchange your existing life insurance or annuity policy for a new contract is it is not a taxable event. 

There are different scenarios where exchanging life insurance policies or annuity contracts might make sense. For example, the advantages of a 1035 exchange include:

  • You need more life insurance coverage than you currently have
  • Do you want to change the type of life insurance policy you have?
  • You’re looking for an annuity contract with lower fees
  • Do you want to restructure your annuity payments?
  • You currently own a variable annuity and your risk tolerance has changed

As long as you’re exchanging contracts within the guidelines set by the IRS all of the above events will be tax-free to you. 

Pros and Cons of a Fixed Annuity

Fixed Annuity Pros

Fixed annuities are meant to be long-term retirement savings vehicles.  They provide a safe, tax-advantaged way to earn a good return on savings needed soon. They are remarkably like CDs, with added benefits:

  • Provide a Guaranteed Interest Rate 
  • Grows Tax-Deferred
  • Principal Protection
  • Offer Some Liquidity
  • The Most Simple of All Annuities

Fixed Annuity Cons

Frequently Asked Questions

Yes. Insurance companies as a whole have a long history of stability, even thru our nation’s most difficult economic times.

Fixed annuities are backed by the full faith and credit of the issuing insurance company so it is important to consider the financial strength of an annuity company when purchasing a fixed annuity.

A “CD Type Annuity” is a type of fixed annuity that guarantees a specified interest rate for a set number of years. They are also often referred to as a Multi-Year Guaranteed Annuity.

When you purchase an annuity you are committing to leave your money there for the duration of your annuity contract (usually 2 to 10 years).

However, most fixed annuities allow taking free withdrawals of interest earned or up to 10% free withdrawals annually (varies by annuity company and contract)

There are no fees for any of the fixed annuities listed on this page and, in general, fixed annuities do not have any fees.

However, there are some fixed annuity products that offer optional income riders, death benefit riders, or long-term care riders for an additional annual fee.

A 3 year annuity is an annuity contract with a 3 year surrender charge schedule (CDSC). When you buy a 3 year fixed annuity your rate is guaranteed for the 3 year term.

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