The best 5 year fixed annuity rate today is 6.30% simple interest offered by Knighthead Life Insurance Company. Compare the current rates for 5 year annuities and buy your annuity online.
*Illustrative snapshot. Click below for live updates & full comparison including carrier strength, liquidity, and renewal options.
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).
Looking to lock in a guaranteed rate for five years? Right now, Knighthead Life Insurance Company leads the market, offering the best 5 year fixed annuity rate at 6.30% simple interest. If you do not intend to make withdrawals and want your retirement savings to accumulate, American Gulf Anchor MYGA offers the best compounding interest rate of 6.30% for five years.
Compare today’s best 5 year fixed annuity rates in the table below. Click on the product name for a detailed review, downloadable brochure, and product specific calculators.
| Carrier / Product Name |
AM Best Rating |
Rate (Fixed) |
Max Age |
Minimum Premium |
Free Withdrawal Yr 1 | Yr 2+ |
Term Length |
Action |
|---|---|---|---|---|---|---|---|
| KIGHTHEAD LIFE - Staysail 5 (simple interest) | A- | 6.30% | 85 | $100,000 | None | 5 yrs | Apply |
| AMERICAN GULF - Anchor MYGA 5 | B++ | 6.30% | 89 | $10,000 | None | 5 yrs | Apply |
| WICHITA NATIONAL LIFE - Security 5 MVA | B+ | 6.25% | 89 | $10,000 | None | 5 yrs | Apply |
| AMERICAN GULF - Anchor MYGA 5 (with 10% free w/d) | B++ | 6.15% | 89 | $10,000 | 10% | 10% | 5 yrs | Apply |
| REVOL-ONE - DirectGrowth 5 | B++ | 6.00% | 85 | $25,000 | None | 5 yrs | Apply |
| REVOL-ONE - DirectGrowth 5 (with interest withdrawals) | B++ | 5.90% | 85 | $25,000 | Interest | 5 yrs | Apply |
| KIGHTHEAD LIFE - Staysail 5 (simple interest) | A- | 5.85% | 85 | $100,000 | 10% | 10% | 5 yrs | Apply |
The rates displayed in this comparison table are for informational purposes only and are subject to change without notice. Actual rates may vary based on individual circumstances including age, state of residence, premium amount, and product availability.
* Important Notice: Revol One DirectGrowth annuity rates are decreasing for the 3, 5, 7, and 10-year fixed annuities. Applications must be signed by November 10, 2025, to lock in current rates. Revol One will hold current rates for 10 business days if you are funding by a check, and for 60 calendar days for transfers or direct rollovers.
The table below lists the highest 5 year fixed annuity rates by AM Best Rating. Insurance companies with a lower AM Best Rating give higher fixed annuity rates. This is compared to insurers with a higher AM Best Rating.
The best 5 year fixed rate annuity from a B+ AM Best rated insurer is 6.30%. The best fixed annuity rate from an insurance company with an A++ AM Best Rating is 4.60% – a 1.70% difference!
| Carrier / Product Name |
AM Best Rating |
Rate (Fixed) |
Max Age |
Minimum Premium |
Free Withdrawal Yr 1 | Yr 2+ |
Term Length |
Action |
|---|---|---|---|---|---|---|---|
| RELIANCE STANDARD LIFE - Eleos MVA 5 | A++ | 4.60% | 85 | $10,000 | 10% / 10% | 5 yrs | Apply |
| NATIONWIDE LIFE INSURANCE CO - Secure Growth 5 MVA | A+ | 4.90% | 90 | $100,000 | 10% / 10% | 5 yrs | Apply |
| AMERICO - Platinum Assure 5 | A | 5.35% | 90 | $25,000 | 5% | 5% | 5 yrs | Apply |
| KIGHTHEAD LIFE - Staysail 5 (simple interest) | A- | 6.30% | 85 | $100,000 | None | 5 yrs | Apply |
| KIGHTHEAD LIFE - Staysail 5 (simple interest) | A- | 5.85% | 85 | $100,000 | 10% | 10% | 5 yrs | Apply |
| AMERICAN GULF - Anchor MYGA 5 | B++ | 6.30% | 89 | $10,000 | None | 5 yrs | Apply |
| AMERICAN GULF - Anchor MYGA 5 (with 10% free w/d) | B++ | 6.15% | 89 | $10,000 | 10% | 10% | 5 yrs | Apply |
| WICHITA NATIONAL LIFE - Security 5 MVA | B+ | 6.25% | 89 | $10,000 | None | 5 yrs | Apply |
A 5 year fixed annuity is a contract between you and an insurance company where you deposit a lump sum of money in exchange for a guaranteed interest rate over five years. The insurance company can’t change your rate during this time, giving you complete certainty about your returns.
Unlike variable annuities, fixed annuities are very simple because you know exactly what you’ll earn over the entire five-year period. This predictability makes these “CD-type” annuities popular among people approaching retirement as well as those who are already enjoying it.
The beauty of these products lies in their simplicity. There are no moving parts, no market indexes to track, and no complicated formulas. You deposit money, it grows at the guaranteed rate, and after five years, you decide what to do next. It’s straightforward financial planning at its best.
Understanding how these annuities work helps you decide if they fit your retirement plan. Let’s break down the process from purchase to maturity.
When you buy a 5-year fixed annuity, you make a single premium payment—that’s insurance-speak for a one-time deposit. Most insurance companies require a minimum investment of $5,000 to $25,000.
You can fund your annuity with money from a savings account, a CD that’s maturing, or transfer funds from another annuity via a 1035 exchange.
Your guaranteed interest rate gets credited to your account according to the schedule outlined in your contract. Most 5 year fixed annuities credit interest annually, though some credit interest monthly or quarterly. The key advantage here is compound growth—you earn interest on your interest.
Let’s say you invest $100,000 at a 5.5% annual rate. After year one, you’d have $105,500. In year two, you earn 5.5% on the full $105,500, not just your original $100,000.
When your five-year term ends, you have several options.
The insurance company typically notifies you 30 to 60 days before maturity, giving you time to evaluate your options and make an informed decision.
Let’s talk about why so many people near or in retirement choose 5 year fixed annuities as part of their financial strategy.
Unlike stocks or bonds, your original investment is 100% protected. This guarantee is backed by the insurance company’s reserves and, in most states, by state guaranty associations that provide additional protection (typically up to $250,000 per person, per company).
You know exactly what you’ll earn from day one. If you lock in a 5.5% rate today, that’s what you’ll get for the entire five years, regardless of whether interest rates fall or the economy enters a recession.
Every dollar of interest you earn stays in your account, growing without being reduced by taxes until withdrawal. Over five years, this tax deferral can add thousands of dollars to your final balance compared to taxable investments.
Stock market crashes, bond market volatility, and real estate downturns—none of them affect your 5-year fixed annuity. This peace of mind is invaluable, especially if you’re close to retirement and don’t have time to recover from market losses.
No financial product is perfect for everyone. Here are the honest downsides you should understand before buying a 5 year fixed annuity.
Surrender charges are penalties for withdrawing more than the allowed free withdrawal amount (interest or 10% annually) before your five-year term ends. These penalties can range from 5% to 9% of your withdrawal amount in the early years, gradually decreasing as you approach maturity.
For example, withdrawing $50,000 in year two might cost you $4,000 in surrender charges.
The trade-off for safety and guarantees is typically lower returns than you might earn in stocks or stock mutual funds over the same period. While the stock market has historically averaged around 10% annually over long periods, the current best 5 year annuity rates hover between 5% and 6%.
Fixed annuities don’t adjust for inflation. If inflation runs at 3% annually and your annuity pays 5.5%, your real return is only about 2.5%. During periods of high inflation, the purchasing power of your annuity’s returns can erode.
Your money is tied up for five years. Surrender charges will apply to any withdrawals above the allowed free withdrawal amount. If you might need substantial access to this money before five years, a 5-year fixed annuity might not be your best choice.
The landscape for 5 year fixed annuity rates today looks dramatically different than it did in 2020 and 2021. During the pandemic and its immediate aftermath, rates dropped to historic lows, with many 5 year fixed annuities paying between 2% and 3%. As the Federal Reserve raised interest rates to combat inflation starting in 2022, annuity rates climbed steadily.
By late 2023 and into 2024, we saw the best MYGA rates reach the 5.5% to 6.50% range—levels not seen since before the 2008 financial crisis. This has made fixed annuities much more attractive compared to other safe investments. However, as the Fed cut rates in September and signaled more potential rate cuts in 2026, these guaranteed annuity rates are gradually declining from their recent peaks.
The key takeaway is that rates are dynamic. When you see attractive fixed annuity interest rates, it often makes sense to lock them in rather than waiting and hoping for even better rates. Once you lock in a rate, it’s yours for the full five years, regardless of what happens to rates afterward.
Several factors influence the rates insurance companies offer on their 5 year guaranteed annuities. Understanding these helps you time your purchase and set realistic expectations.
Federal Reserve policy is the biggest driver. When the Fed raises its benchmark interest rate, insurance companies can invest in higher-yielding bonds and other fixed-income securities. Conversely, when the Fed cuts rates, annuity rates typically fall.
Treasury bond yields directly impact annuity pricing. Insurance companies invest heavily in government bonds, so when 5-year Treasury yields rise, so do 5 year fixed annuity rates.
Competition among insurance companies plays a role. Companies use attractive rates to gain market share and attract new customers. When one major carrier raises rates, others often follow to remain competitive.
The insurance company’s need for capital matters too. Companies that want to grow their business or need to invest customer premiums in new opportunities may offer higher rates temporarily to attract deposits.
State regulations can affect rates since insurance is regulated at the state level. Some states have more stringent reserve requirements or consumer protection rules that can impact what rates companies can profitably offer.
How do 5 year fixed annuities stack up against other conservative investments? Let’s compare them side by side.
| Feature | 5 Year Fixed Annuity | 5 Year Bank CD |
|---|---|---|
| Current Rates | 5.50% - 6.30% | 3.50% - 4.50% |
| Tax Treatment | Tax-deferred growth | Taxed annually on interest |
| FDIC/State Protection | State guaranty association* | FDIC insured up to $250K |
| Early Withdrawal | Surrender charges apply** | Penalty (typically 3-6 months interest) |
| Best For | Long-term savers, retirement funds | Emergency funds, short-term goals |
*State guaranty associations typically protect $250,000+ per person, per carrier (varies by state).
**Most 5-year annuities allow 10% penalty-free withdrawals annually.
Certificates of Deposit (CDs) are the closest comparison. Both offer guaranteed returns, but differ in important ways: CDs carry FDIC insurance up to $250,000, while annuities have state guaranty association protection.
CD interest is taxed annually regardless of withdrawals; annuities grow tax-deferred. Top 5-year CDs currently yield around 4.5% to 5%, while leading annuities offer 5.25% to 5.75%.
Treasury Bonds offer ultimate safety—U.S. government-backed—but lower yields: approximately 4% to 4.5% versus annuities’ 5.5%+. Treasury interest is federally taxable, and while Treasuries provide liquidity, you risk principal loss if rates rise.
Money Market Accounts provide complete liquidity but with fluctuating rates (currently 4% to 5%). Unlike annuities’ locked guarantees, rates can drop anytime. They suit emergency reserves, not committed five-year savings.
For retirement savings you won’t need for five years—seeking guaranteed growth, principal protection, and tax efficiency—fixed annuities are hard to beat.
A 5 year fixed annuity isn’t right for everyone. Here’s who benefits most from these products.
Pre-retirees in their 50s and early 60s who want to protect a portion of their retirement savings from market volatility while earning guaranteed returns. If you’re five to ten years from retirement, you don’t have time to recover from a major market crash. Putting some of your portfolio in a 5 year fixed annuity creates a safety net.
Recent retirees who need to preserve capital while earning more than savings accounts offer. If you’ve just retired with a lump sum from a 401(k) rollover, placing a portion in a 5 year guaranteed annuity ensures that money will be there when you need it, grown by a predictable amount.
Conservative investors who lose sleep over market fluctuations. If checking your investment balance during market downturns causes anxiety, fixed annuities offer peace of mind. The guaranteed rate means you never see a negative return, which is psychologically valuable for risk-averse individuals.
People with large cash positions exceeding FDIC insurance limits who want safe alternatives to spreading money across multiple banks. If you have $500,000 in cash, you could put $250,000 in FDIC-insured accounts and $250,000 in highly-rated fixed annuities for similar safety with potentially better returns.
Those seeking CD alternatives who want higher rates and tax deferral. If you’re already comfortable with CDs, fixed annuities are a natural next step, offering better returns in exchange for similar commitment.
On the flip side, 5 year fixed annuities probably aren’t right for you if you’re young with decades until retirement (you can afford more market risk for higher returns), if you might need the money before five years (liquidity is limited), or if you’re comfortable with market volatility and want maximum growth potential.
Shopping for the best 5-year fixed annuity rates requires more than just looking at the headline number. Here’s how to compare annuity rates effectively.
A 5.75% rate isn’t necessarily better than a 5.65% rate if the higher-rate company has weak financial ratings or unfavorable contract terms. Consider the complete package: rate, company strength, surrender charges, and withdrawal provisions.
Your annuity is only as safe as the insurance company backing it. Check ratings from A.M. Best (look for A- or better), Moody’s (A3 or better), and Standard & Poor’s (A- or better). These ratings indicate the company’s ability to meet its financial obligations.
Surrender charges are penalties for withdrawing more than the free withdrawal amount before your term ends. Compare both the surrender charge percentages and how long they last. A typical schedule might be: Year 1: 8%, Year 2: 7%, Year 3: 6%, Year 4: 4%, Year 5: 2%.
Most 5 year fixed annuities allow penalty-free withdrawals of up to 10% of your account value annually. Some offer more generous provisions—perhaps 10% of your original premium plus all accumulated interest. Others are more restrictive, allowing only 5% or limiting withdrawals to interest only.
When you shop annuity rates, make sure you’re comparing the same term length and similar contract features. A 5-year rate will differ from a 3-year or 7-year rate. A contract with a 10% annual free withdrawal is different from one with 5% withdrawals.
Ready to purchase? Here’s the step-by-step process to get annuity quotes and complete your purchase.
Decide how much you want to allocate to a 5 year fixed annuity. Financial advisors often recommend limiting any single annuity to no more than 25-30% of your liquid net worth to maintain diversification and liquidity. Make sure you have adequate emergency funds in accessible accounts before committing money to an annuity.
Check minimum deposit requirements—they typically range from $5,000 to $25,000. Some companies offer better rates for larger deposits, with rate tiers at $50,000, $100,000, or $250,000.
Use online resources to find the best annuity rates. Several websites aggregate current rates from multiple carriers, making it easy to compare. My Annuity Store, Inc. is a multi-carrier online annuity platform where you can compare live annuity rates from many top annuity companies in the U.S.
Don’t rely solely on advertised rates—they change frequently. When you’re ready to buy, get current quotes directly from insurance companies or agents to ensure you’re seeing today’s actual rates.
You can buy annuities directly from some insurance companies, but many only sell through licensed agents or brokers. Working with an independent agent who represents multiple companies often gets you access to more options and competitive rates.
Good agents provide valuable service: they shop multiple carriers for you, explain contract details, handle paperwork, and don’t charge you anything (they’re compensated by the insurance company through commissions). However, make sure your agent is truly independent and not pushing products from just one or two companies.
Annuity applications are straightforward. You’ll provide personal information (name, address, Social Security number, date of birth), beneficiary designations, and details about how you’re funding the annuity. The application usually takes 15-30 minutes to complete.
For larger annuities or if you’re over a certain age, the insurance company might require a brief phone interview or additional health questions, though 5 year fixed annuities rarely have extensive underwriting.
You can fund your annuity through several methods: check, wire transfer, direct rollover from a 401(k) or IRA, or 1035 exchange from another annuity. The funding method affects timing—checks can take a week or more to clear, while wire transfers are immediate.
If you’re doing a rollover or 1035 exchange, work closely with your agent to ensure proper paperwork. Mistakes in these transfers can create unwanted tax consequences.
Once your application is approved and funds received, the insurance company issues your contract. Read it carefully. Verify the guaranteed rate, term length, surrender charge schedule, and free withdrawal provisions match what you expected. You typically have a 10-30 day “free look” period to review the contract and cancel for a full refund if you’re not satisfied.
Understanding the tax treatment of fixed annuities helps you plan effectively and avoid surprises.
Tax-deferred growth is the primary tax advantage. Interest accumulates inside your annuity without generating annual tax bills. You only pay taxes when you withdraw money. (8)
Ordinary income tax on earnings applies when you withdraw. The earnings portion of your withdrawal is taxed as ordinary income at your current tax rate, not the lower capital gains rate.
Qualified annuities are taxed on 100% of withdrawals. Withdrawals from a non-qualified annuity are only taxed on the gain (interest earned). (6)
The inherited annuity five-year rule is an IRS guideline that specifies how long non-spouse beneficiaries have to withdraw funds from certain annuities after the original owner dies. (7)
No step-up in basis at death means your beneficiaries inherit the annuity’s tax liability. Unlike stocks or real estate that get a step-up in basis, annuities pass to beneficiaries with the same tax treatment. Your heirs will owe ordinary income tax on the earnings when they withdraw.
Consider consulting a tax professional about your specific situation, especially if you’re dealing with large amounts or complex scenarios like required minimum distributions.
As your five-year term ends, you have several options. Understanding them in advance helps you make the best decision.
About 30-60 days before maturity, the company will notify you of the renewal rate they’re offering. This rate could be higher or lower than your original rate, depending on market conditions.
To get the best rate possible, you should shop and compare annuity rates offered by other companies.
If you find better rates elsewhere, you can transfer your money to a different annuity through a 1035 exchange. This IRS-approved process allows you to move money from one annuity to another without triggering taxes.
The transfer goes directly from one insurance company to the other—you never touch the money—preserving the tax deferral.
You can withdraw some or all of your money at maturity without penalties. Partial withdrawals let you access some money while keeping the rest invested.
Instead of taking a lump sum, you can convert your annuity into guaranteed lifetime income or income for a specific period. This is called annuitization.
Annuitization can make sense if you want a guaranteed income you can’t outlive, but this decision can be irreversible. Consider all options carefully and perhaps consult a financial advisor before annuitizing.
Learn from others’ mistakes. Here are the most common errors people make with 5-year fixed annuities.
Surrender charges can be steep and can result in large penalties if you withdraw your money early. Fixed annuities are available as 2 to 10-year contracts; be sure you pick the duration that matches your liquidity needs.
Chasing the highest rate without checking the insurance company’s financial strength is risky. A company offering rates significantly higher than competitors might be taking on more risk or have weaker finances.
Tying up too much of your net worth in annuities and other illiquid investments creates problems when unexpected expenses arise. A good rule of thumb: keep at least 6-12 months of expenses in liquid accounts. Diversification and liquidity are your friends.
If your annuity is in an IRA and you’re over age 73, you must take required minimum distributions. Make sure your annuity’s free withdrawal amount is sufficient to cover your RMD, or you might face penalties.
A $100,000 investment into a 5 year annuity would grow to $133,822.56 in five years, assuming a rate of 6.00% compounding. You can see today’s best 5 year fixed annuity rates in the live annuity rate table above. Then enter:
The rates you see on this page are available today—but fixed annuity rates can and do change frequently based on market conditions.
No pressure. No sales pitch. Just honest guidance from people who’ve spent their careers in this business.
State guaranty associations provide protection if an insurance company fails, typically covering up to $250,000 per person, per company (limits vary by state). These associations are funded by insurance companies operating in each state. While insurance company failures are rare due to strict regulation and reserve requirements, this protection provides an additional safety net.
No, annuities are not FDIC insured because they're insurance products, not bank deposits. However, they are protected by state guaranty associations, which provide similar protection (typically $250,000 per person, per company) if an insurance company fails. Additionally, insurance companies are heavily regulated and must maintain substantial reserves to back their guarantees.
Yes, but with limitations. Most contracts allow penalty-free withdrawals of up to 10% of your account value annually. Withdrawals beyond this amount trigger surrender charges, which can be 5-9% of the withdrawn amount in early years. You can always access your money—you just pay penalties for accessing more than the free withdrawal amount.
Minimum deposits typically range from $5,000 to $25,000, depending on the insurance company. Some companies have lower minimums ($2,000-$5,000), while others require $50,000 or more. Higher deposit amounts sometimes qualify for better rates, with rate tiers at $50,000, $100,000, or $250,000.
Earnings grow tax-deferred inside the annuity. When you withdraw, earnings are taxed as ordinary income at your current tax rate. For non-qualified annuities (funded with after-tax money), only the earnings are taxable. For qualified annuities (funded with IRA or 401(k) money), the entire withdrawal is taxable. If you're under 59½, you may also face a 10% early withdrawal penalty on earnings.
You cannot lose money due to market performance—your principal and earned interest are guaranteed by the insurance company. However, you could lose money to surrender charges if you withdraw more than allowed before maturity, or to inflation if your fixed return doesn't keep pace with rising prices. Your account value itself never goes down due to market conditions.
Rates can change weekly or even daily, depending on market conditions and each company's need for new business. Insurance companies adjust rates based on Treasury yields, competition, and their capital needs. When you lock in a rate, it's guaranteed for your entire five-year term, but the rates available to new customers continue fluctuating.
Yes, they're the same product with different names. MYGA stands for "multi-year guarantee annuity"—the "multi-year" refers to the guaranteed rate period. A 5 year MYGA and a 5 year fixed annuity are identical. Some people use "MYGA" to distinguish these products from traditional fixed annuities that might have different rate structures, but they're essentially the same thing.
Important Terms to Know When Shopping for an Annuity
Understanding these key terms helps you make informed decisions and avoid surprises.
Guaranteed Interest Rate
This is the fixed rate the insurance company promises to pay for your entire five-year term. It’s stated in your contract and cannot be changed.
Surrender Period and Charges
The surrender period is the time period surrender charges are applied to early withdrawals. The surrender period is equal to the length of the annuity contract, so five years for a 5-year annuity.
Free Withdrawal Provisions
These are the amounts you can withdraw each year without triggering surrender charges. The most common provisions are 10% of your account value annually, or free withdrawals of your interest earned.
Renewal Rates
When your five-year term ends, if you don’t take action, most annuities automatically renew at the company’s current rates. Typically, you have a 30-day window to make a decision, so plan ahead.
Annuitization Options
Annuitization is the process of converting a lump sum into a stream of guaranteed income payments. It is a requirement that all fixed annuity contracts offer an annuitization option at maturity.
Death Benefit
If you die during the five-year term, your beneficiaries receive the annuity’s current value (your original deposit plus accumulated interest). Most contracts waive surrender charges upon death, but some require the beneficiary to hold the annuity to the end of the surrender period.
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.
We regularly update this page and cite primary sources, carrier filings, and regulator guidance:
Important Disclosure:
The rates displayed in this comparison table are for informational purposes only and are subject to change without notice. Actual rates may vary based on individual circumstances, including age, state of residence, premium amount, and product availability. Rates are current as of [DATE] and should be verified at the time of application.
This comparison is not intended as a recommendation or endorsement of any specific insurance company or product. My Annuity Store, Inc. is an independent insurance agency and is not affiliated with or acting as a fiduciary for any insurance carrier listed. We receive compensation from insurance companies for the sale of annuity products in the form of commissions, which may vary by carrier and product.
Annuities are long-term financial products designed for retirement purposes. Early withdrawals may be subject to surrender charges, tax penalties, and other fees. Before purchasing an annuity, carefully review the product prospectus or disclosure documents and consult with a qualified financial or tax professional to determine if an annuity is appropriate for your specific situation.
Past performance and current rates are not guarantees of future results. All guarantees are backed by the claims-paying ability of the issuing insurance company.
For questions or to discuss which annuity option may be right for you, contact My Annuity Store at 855-583-1104 or info@myannuitystore.com.
