Last Updated February 21, 2021

The table below lists the best 4 year fixed annuity rates for February 2021.  As of February 21, our best 4 year fixed annuity rate was Oceanview Life’s Harbourview 4 fixed annuity.

InsurerAM Best RatingMinimumLiquidityRate
Oceanview Life and Annuity
Harbourview 4
A-$20,000.000% / 10%2.60%
Oxford Life Insurance Company
Multi-Select 4
A-$20,000.00Int / 10%2.25%
Guaranty Income Life
Guaranty 4 Annuity
B++$5,000.00Int / Int2.00%
Sagicor Life Insurance Company
Milestone MYGA 4 High Band
A-$100,000.000% / 10%2.00%
Guaranty Income Life
Guaranty Rate Lock 4 High Band
B++$250,000.000% / 5%1.95%
Sagicor Life Insurance Company
Milestone MYGA 4 CA High Band
A-$100,000.000% / 10%1.95%
Sagicor Life Insurance Company
Milestone MYGA 4 FL High Band
A-$100,000.000% / 10%1.95%
Guaranty Income Life
Guaranty Rate Lock 4 Low Band
B++$10,000.000% / 5%1.85%
Guaranty Income Life
Guaranty Rate Lock 4 Mid Band
B++$100,000.000% / 5%1.85%
Guggenheim Life and Annuity Company
Preserve MYGA 4 High Band
B++$250,000.000% / 10%1.80%
American General Life Insurance Company
American Pathway VisionMYG 4 High Band
A$100,000.000% / 15%1.75%
American Pathway VisionMYG 4 High Band
A$100,000.000% / 15%1.75%
Guaranty Income Life
Guaranty Rate Lock 4 (Non MVA) High Band
B++$250,000.000% / 5%1.70%

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

What is a Fixed Annuity?

A fixed annuity is essentially a Certificate of Deposit (CD) sold by an insurance company instead of a bank. Fixed annuities pay a guaranteed rate of return for a specified period of time (usually 3-10 years).

In addition to providing a guaranteed rate of return for the investment term, fixed annuities, and all annuities, give you the opportunity to turn those savings into lifelong pension-like income. The fixed annuity guarantee is backed by the financial strength of the issuing insurance company.

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

    • CD type annuity
    • Multi Year Guaranteed Annuity (MYGA)
    • Single Premium Deferred Annuity (SPDA)
    • Traditional Fixed Annuity
    • Flexible Premium Deferred Annuity (FPDA)
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 contract will explain whether, how and when this can happen. Often the interest rate is fixed for a number of years and then changes periodically based on current rates. Payouts can be for an entire lifetime, or you can choose another time period.  

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

Fixed Annuity vs. CD's

Fixed annuities are 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. 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 Insurance Guaranty Associations provide a safety net for their state’s annuity policyholders. These Guaranty Associations guarantee policyholders continue to receive coverage (up to the limits spelled out by state law) even if their insurer is declared insolvent. 

You can view your states limits at our State Guarantee Associations Explained page.

SOLD BYInsurance CompaniesBanks
AMOUNT YOU CAN INVEST$2,000 - $1,000,000Essentially Any Amount
INVESTMENT DURATION3 years - 10 years3 months - 5 years
INTEREST RATESVaries by insurer, term and investment amount. Typically higher than CDsVaries by financial institution, term and investment amount.
LIQUIDITYVaries by insurer and annuity. Usually either 10% of account value or accumulated interest annually.Almost always accumulated interest.
GUARANTEESBacked by the claims paying ability of issuing Insurer and by State Guaranty Funds.Backed by the FDIC up to $250,000 per depositor, per institution.
DEATH BENEFITAsset passed directly to beneficiary without going through the probate processProbate process required to pass asset to heirs
1035 exchange banner my annuity store, inc

1035 Exchanges for a 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

1035 Exchange Rules

There are a couple of important rules that must be followed in order to receive the benefits of a 1035 Exchange.

  • The tax code says that the old annuity policy must be exchanged for a new policy – you cannot receive a check and apply the proceeds to the purchase of a new insurance policy.
  • You can 1035 exchange from a life insurance policy to an annuity
  • You can 1035 exchange from an annuity to a long term care policy under the Pension Protection Act of 2006
  • You can not 1035 exchange from an annuity to a life insurance policy

Here is an example of an actual 1035 Exchange form you would need to complete to move from one annuity to another via a 1035 Exchange.

Advantages of a 1035 Exchange

The primary advantage of using a 1035 exchange to change your life insurance policy or annuity choices is to avoid triggering taxes on those transactions. There are different scenarios where exchanging policies or annuity contracts might make sense. For example, advantages of a 1035 exchange include:

  • You need more life insurance coverage than you currently have
  • You want to change the type of life insurance policy you have
  • You’re looking for an annuity contract with lower fees
  • 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 you all of the above events will be tax-free to you. 

Fixed Annuity Taxation

Things to Consider

The deciding factor on how your annuity will ultimately taxed depends ultimately on the money you used to buy it. Whenever a client asks us how are annuities taxed, our first response is where did you get the money to buy it? 

Since we are talking about taxes there is no way to say with certainly exactly how your annuity will be taxed. Tax laws and tax rates can and do change all the time. 

However, we can make very educated guesses about certain scenarios based upon how annuities have been and are taxed currently. First we will look at the types of funds you can use to purchase an annuity and explain the differences in how they are taxed.


Roth IRA Taxation

If you purchase an 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.

Firstly, an annuity purchased with qualified funds is considered a qualified annuity. 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 to go from tax-deferred to tax-free but that is not the case.

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


Qualified Annuity Taxation

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

If you own a non-qualified annuity, you will only pay income tax on the gain in your contract but not the money you used to purchase the annuity. The money used to purchase a non-qualified annuity is considered the “basis”. Insurance companies keep track of your “cost-basiswhich is the original amount used to purchase an investment. 

This “cost-basis” is the amount of money on which you will not pay taxes because you’ve already taxes on it once. The interest earned will be taxed as ordinary income, with a few exceptions that we will discuss momentarily.


Lifetime Income Annuity Taxation

There are really two types of income annuity payout options: lifetime or period certain. A lifetime annuity is an annuity that guarantees payments for as long as you are alive whereas a period certain annuity guarantees payments for a specified period of time. 

Remember, if you own a non-qualified annuity you only pay taxes on the interest earned not the original cost basis. So to determine what portion your monthly payments are taxable there is a calculation that needs to be done establish what percent of each annuity is principal (or cost-basis) and what percent is interest earned.

These calculations establish your exclusion ratio, or in plain terms, the percent of each annuity payment that is exempt from income taxes. The method of determining the exclusion ration varies depending on whether you have a period certain annuity or a lifetime annuity. Lets look at an example for each.

Fixed Annuity Shopping Tips

Fixed annuities, or 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 besides just looking for the highest guaranteed rate of return.

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. 

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. 

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

Fixed Annuity Pros and COns


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:

Guaranteed Rate of Return

Fixed annuities offer a set interest rate for the entire length of the contract term


As a retirement savings vehicle fixed annuities receive preferential tax treatment from the IRS. Taxes on interest earned are not paid until distributions are made. For a fixed annuity, this means that interest will accumulate and compound without incurring annual taxes, as is the case for a CD.

Principal Protection

Fixed Annuities offer a safe and steady way to grow your retirement savings protecting them from loss due to market fluctuations.

Some Liquidity

Most fixed annuities provide some liquidity in the form of annual free withdrawals. The free withdrawal amount is often either interest earned or 10% of the previous years account value (if you are over age 59 1/2. 

Most Simple of All Annuities

Some type of annuities such as fixed index and variable are highly customizable with many options from which to choose. Fixed annuities are very simple and easy to understand and don’t offer additional riders for a fee.


Pre 591/2 10% IRS penalty.

Fixed annuities are really meant to be used for retirement savings. The IRS issues a 10% penalty on gains withdrawn from a fixed annuity for account holders under age 59½.

Limited Income Options

To be classified as an annuity an insurance product must contractually guarantee the ability to convert you contract into a lifetime income. However, a fixed annuity is definitely the least expensive or most efficient annuity product to generate a lifetime income; they simply have guaranteed annuitization rates built into them. Most often we find new money rates are better than the annuitization rates built into an existing annuity.

Fixed Annuity Frequently Asked Questions

Yes. Insurance companies as a whole have a long history of stability, even through 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 the issuing company.


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 contract you are committing to leave your money there for the duration of your annuity (usually 2 to 10 years). However, most fixed annuities allow to take free withdrawals of interest earned or up to 10% free withdrawals annually (varies by annuity company and contract)

There are 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.

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Annuities are distributed by My Annuity Store, Inc. Guarantees are subject to the claims-paying ability of the insurer. My Annuity Store, Inc. does not advise clients on the purchase of non-fixed annuity products. The information presented here is not of tax or legal nature and is not intended to be a recommendation to purchase a fixed annuity, fixed index annuity, variable annuity contract, registered index linked annuity (RILA), immediate annuity (SPIA), longevity annuity, or Qualified Longevity Annuity Contract (QLAC). 

The contract features described may not be current and may not apply in the state in which you reside. Annuities are issued by Insurance companies and contracts are ‘state-specific’. Insurance companies also change their products and information often and without notice. Annuities are subject to the terms and conditions of the specific contract issued by the insurer, are not FDIC or NCUA insured, are not bank guaranteed, may lose value, and are not a deposit. Please call (855) 583-1104 if you have any questions or concerns. 

The information presented here is not a representation regarding the suitability of any concept or product(s) for an individual and it does not provide tax, accounting or legal advice. It is important to read the prospectus carefully and consider your objectives, risks, fees and charges associated with the contract. You should always consult your own financial planning, tax, and legal counsel to determine if a fixed annuity, immediate annuity, longevity annuity, or Qualified Longevity Annuity Contract are suitable in your financial situation.