Best Fixed Annuity Rates May 2022

Last updated: May 21, 2022

Currently, Oceanview Life and Annuity Company has the best fixed annuity rate at 4.30%; available at a 6-year fixed annuity.

So what companies have the highest annuity rates? Below are today’s best-fixed annuity rates by term for 2-year to 10-year annuities.

Term InsurerAnnuityRatingRateApply
2 Years Oceeanview logo OceanviewHarbourview 2A-2.85%
3 Years Sagicor life logo SagicorMilestone 3A-3.50%
4 Years Sagicor life logo SagicorMilestone 4A-3.70%
5 Years Security sentinel life logo Sentinel SecurityPersonal ChoiceB++4.05%
6 Years Oceeanview logo OceanviewHarbourview 6A-4.30%
7 Years Security sentinel life logo Sentinel SecurityPersonal ChoiceB++4.10%
8 Years Oxford life logo Oxford LifeMulti-Select A3.80%
9 Years Oxford life logo Oxford LifeMulti-Select A3.65%
10 Years Atlantic coast life logo Atlantic Coast LifeSafe HavenB++4.15%

*NOTE: Click on the insurer or annuity product name for more details. 

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Best 3 Year Fixed Annuity Rates

The best 3 year guaranteed annuity rate is 3.50%. Below are the current highest 3 year fixed annuity rates for May 2022.

Term Annuity CompanyAnnuityRatingRateApply
3 Years Sagicor life logo SagicorMilestone 3A-3.50%
3 Years Athene annuity logo AtheneAthene MYG 3A3.50%
3 Years Oceeanview logo OceanviewHarbourview 3A-3.35%
3 Years Fidelity & guaranty life annuity logo Fidelity & GuarantyGuarantee Platinum 3A-3.15%
3 Years New york life insurance company logo New York LifeSecure TermA++3.05%
3 Years Guggenheim life and annuity ratings & review my annuity store GuggenheimPreserve MYGAA-3.00%

Best 5 Year Fixed Annuity Rates

Today’s best 5 year fixed annuity rate is 4.05% as of May 16th, 2022.

Term Annuity CompanyAnnuityRating LiquidityRateApply
5 Years Security sentinel life logo Sentinel SecurityPersonal ChoiceB++None4.05%
5 Years Atlantic coast life logo Atlantic Coast LifeSafe Haven 5B++None4.05%
5 Years Sagicor life logo SagicorMilestone MYGAA-None | 10%3.85%
5 Years Athene annuity logo AtheneMaxRateAInterest3.85%
5 Years Americo financial annuity logo Americo FinancialPlatinum Assure 5A10%3.75%
5 Years Fidelity & guaranty life annuity logo Fidelity & GuarantyGuarantee-Platinum 5A-Interest3.70%

Best 7 Year Fixed Annuity Rates

The best 7 year fixed annuity rate is 4.10% as of May 16th, 2022. 

Term Annuity CompanyFixed AnnuityRatingRateApply
7 yrs Atlantic coast life logo Atlantic Coast LifeSafe Harbor B++4.10%
7 yrs Security sentinel life logo Sentinel SecurityPersonal Choice 7B++4.10%
7 yrs Athene annuity logo AtheneMaxRateA4.00%
7 yrs Sagicor life logo Sagicor LifeMilestone 7A-3.85%
7 yrs Fidelity & guaranty life annuity logo Fidelity & GuarantyGuarantee-PlatinumA-3.75%

Best 10 Year Fixed Annuity Rates

The highest guaranteed 10 year fixed annuity rate is 4.15% as of May 16th, 2022. 

Term Annuity CompanyFixed AnnuityRatingRateApply
10 yrs Atlantic coast life logo Atlantic Coast LifeSafe HavenB++4.15%
10 yrs Security sentinel life logo Sentinel SecurityPersonal ChoiceB++4.15%
10 yrs Oceanview annuity logo OceanviewHarbourview 10A-3.85%
10 yrs Oxford life logo Oxford LifeMulti-SelectA-3.70%
10 yrs Guggenheim life logo Guggenheim LifePreserve MYGA 10A-3.45%

Understanding Annuity Rates

Annuity rates are important because they represent the rate of return you will receive the money you invest in an annuity contract. 

Fixed Annuity Rates

Money in a fixed deferred annuity earns interest determined by an annuity rate set by the insurance company. A fixed annuity rate is guaranteed for the initial surrender period. After your initial surrender period is over you will have the option to access the newly declared rate, transfer to a new annuity, or withdraw your cash value.

Variable Annuity Rates

Variable annuities earn investment returns based on the performance of the investment portfolios, known as “subaccounts,” where you choose to put your money. The return earned in a  variable annuity isn’t guaranteed. 

The value of the subaccounts you choose could go up or down. If they go up, you could make money. But, if the value of these subaccounts goes down, you could lose money. Also, income payments to you could be less than you expected.

Fixed Index Annuity Rates

Fixed indexed annuities are a type of fixed annuity that earns interest based on the performance of a stock market index

You can view today’s best-fixed index annuity rates here if you are looking for them instead.

Single-Premium Immediate Annuity Rates

Single premium immediate annuities begin to make income payments immediately. When you annuitize you give convert your asset to income steam and give up control of your money completely. 

For this reason, SPIAs are not very popular, according to the Secure Retirement Institute, immediate annuities were only 2.29% of all annuity sales during the first 9 months of 2021.  

 

Type of Annuity/
Features
Variable
Annuity
Index
Annuity
Fixed
Annuity
Immediate
Annuity
Longevity
Annuity
Principal ProtectionNoYesYesYesYes
Liquidity OptioinsYesYesYesNoNo
Maintain Control of AssetYesYesYesNoNo
Tax-DeferralYesYesYesNoNo
Guaranteed RORNoNoYesNoNo
Guaranteed IncomeYesYesYesYesYes
Cost of Living Adjustments (COLA)YesYesNoYesYes
Death BenefitYesYesYesYes/NoYes/No
LTC EnhancementsYesYesYesNoNo

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Are Annuities Better Than a CD?

Fixed annuities work very much like a certificate of deposit (CD) but typically pay higher rates than CDs. Below are some of the similarities between the two:

  • Both pay a guaranteed rate for a set number of years 
  • Both provide principal protection
  • Both typically allow free withdrawals of interest
  • Both provide full account value lump-sum death benefit
  • Fixed Annuities grow tax-deferred
  • Fixed Annuities can provide guaranteed lifetime income
  • CDs are FDIC Insured
  • Fixed Annuities are guaranteed by the claims-paying ability of the issuing life insurance company and State Guaranty Associations

CD vs Fixed Annuity Comparison Chart

 FIXED ANNUITYCD
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 but usually higher than CDs.Varies by bank, term and investment amount.
LiquidityUsually, 10% annually or interest earned.Almost always accumulated interest.
GuaranteesBacked by Insurance Company & State Guaranty Associations.Backed by the FDIC.
Death BenefitMay avoid probate.Probate process required.

The Federal Reserve and Interest Rates

Federal reserve building

Current annuity rates often mirror interest rates available in bonds. When bond rates increase, annuity rates usually go up as well. That’s because insurance companies invest most of their general account in fixed income securities, such as high grade bonds.

The Federal Reserve signaled it would begin steadily raising interest rates in mid-March, its latest step toward removing stimulus to bring down inflation.

The Federal Reserve is expected to start raising interest rates next month and not slow down until well into 2023, though the slope of the increases might be a bit gentler. 

Annuity rates tend to move in the same direction as 10 Year Treasuries because insurance companies invest a large portion of their general account in high-quality bonds.

Data last week showed U.S. consumer prices rose at their fastest pace since the early 1980s, fueling market speculation for a hefty 50-basis-point hike from the Fed’s March 15-16 meeting.¹

Fed Chairman Jerome Powell said Wednesday that the central bank was ready to raise rates at its March 15-16 meeting and could continue to lift them faster than it did during the past decade.

“This is going to be a year in which we move steadily away from the very highly accommodative monetary policy that we put in place to deal with the economic effects of the pandemic,” he said at a news conference following a Fed policy meeting.²

If that holds true annuity rates may continue to rise throughout 2022.

Best Fixed Annuity Companies

The below table lists the 10 Best Fixed Annuity Companies by Individual U.S. Sales.

Insurance CompanyA.M. Best
Rating
Comdex
Score
2019 Fixed
Annuity Sales
Global Atlantic Financial GroupA75$4,684,876
New York LifeA++100$9,863,105
AIG CompaniesA82$7,237,372
Massachusetts Mutual LifeA++98$3,854,866
Pacific LifeA+93$2,873,727
Principal Financial GroupA91$2,844,881
Western Southern GroupA+96$2,468,257
Symetra FinancialA82$2,103,435
MetLifeA+95$1,443,005
Great AmericanA82$1,403,162

Today's Best Fixed Annuities

What is a Fixed Annuity?

With a deferred fixed annuity, the life insurance company guarantees both the rate of return (the annuity 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 an 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

Pros and Cons of Fixed Annuities

Pros

  • Guaranteed Annuity Rates
  • Grow Tax-Deferred
  • Principal Protection
  • You can exchange your fixed annuity for a new one via a 1035 Exchange 
  • The most simple type of annuity
  • Usually provide some liquidity
  • Low investment minimums
  • Full account value passes directly to the beneficiary at death

Cons

  • Withdrawals before age 59½ may have a 10% IRS penalty
  • Offer limited lifetime Income Options
  • Surrender charges for excess withdrawals during the initial surrender period
  • Fixed annuities don’t offer a rate of returns as high as the stock market
  • Limited Liquidity
  • Annuity rates may not keep up with inflation
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How Are Annuities Taxed?

Under current federal law, annuities receive special tax treatment. Income tax on annuities is deferred, which means you don’t pay taxes on the interest your annuity earns until you withdraw it from your annuity. Tax-deferred accumulation is not the same as tax-free accumulation. 

An advantage of tax deferral is that the tax bracket you are in when you receive annuity income payments may be lower than the one you are in during the accumulation period. 

You will also be earning interest on the amount you would have paid in taxes during the accumulation period. 

Most states’ tax laws on annuities follow federal law. You should consult a professional tax advisor to discuss your individual tax situation.

Roth IRA Annuity Taxation

If you buy an annuity using a Roth or Roth 401(k) you likely will not pay federal income tax at all.

Qualified Annuity Taxation

Any annuity purchased with qualified funds, like a 401(k) or IRA, 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). 

When you begin to make withdraws from a qualified annuity you will pay normal federal income taxes.

Non-Qualified Annuity Taxation

A non-qualified annuity is an annuity purchased with after tax-dollars such as money from savings, checking accounts, or a personal brokerage account. You will only pay tax on your earnings with you withdraw your money.

Frequently Asked Questions

Fixed annuities are not FDIC insured. Instead, they are insured by the claims paying ability of the issuing life insurance company and by State Guaranty Associations.

Fixed annuities do not have annual fees in general. 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 5 year fixed annuity is an annuity contract with a five year surrender charge schedule (CDSC). When you purchase a 5 year fixed annuity the interest rate is guaranteed for the initial 5 year contract period and you agree to keep the annuity for the 5 year contract term.

The best fixed annuity rate today is 4.30% available in a 6 year annuity; 3.85% for a 5 year annuity, 3.50% for a 3 year fixed annuity, and 2.85% for a 2 year annuity (as of May 21, 2022).

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