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Best Fixed Annuity Rates for September 2022

Rates Updated September 27, 2022 (5:37 PM Eastern Time.)

Today's Best Fixed Annuity Rates

As of September 27, 2022, Ibexis Life and Annuity Insurance Company has the best fixed annuity rate of 5.10% for a five year fixed annuity.

Fixed annuities provide a guaranteed interest rate for a specified period of time. They are often referred to as a “CD Type Annuity” because of its’ similarities to a Certificate of Deposit.

Below are September’s best guaranteed annuity rates by contract term.

*NOTE: Click on the insurer or annuity product name for more details. You can find fixed index annuity rates here if you are looking for them instead.

Table of Contents

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Best 3 Year Fixed Annuity Rates

The best 3 year guaranteed annuity rate is 4.20%. Below are today’s best 3 year fixed annuity rates as of September 27, 2022.

Best 5 Year Fixed Annuity Rates

Today’s best 5 year fixed annuity rate is 5.10% as of September 27, 2022.

Best 7 Year Fixed Annuity Rates

The best 7 year fixed annuity rate is 4.72% as of September 27, 2022.

Best 10 Year Fixed Annuity Rates

The highest 10 year guaranteed annuity rate is 4.75% as of September 27, 2022.

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Understanding Annuity Rates

Annuity rates are important because they indicate how much you will earn on your investment in an annuity contract.

fixed index annuity crediting methods

Fixed Index Annuity Rates

Fixed indexed annuities earn interest based on the performance of a stock market index offering more upside potential along with downside protection.

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Fixed Annuity Rates

Money in a fixed annuity earns interest determined by an annuity rate set by the insurance company. A fixed annuity rate is guaranteed for the initial surrender period. 

income annuity icon

Immediate Annuity Rates

Immediate annuities are a type of annuity that provides guaranteed payments for a specific period of time. The payments are based on factors such as your age and income payment options.

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Variable Annuity Rates

Variable annuities earn investment returns based on the performance of “subaccounts." You can lose money in a variable annuity.

Types of Annuities Comparison Chart

FeaturesVariable
Annuity
Index
Annuity
Fixed
Annuity
Immediate
Annuity
Longevity
Annuity
Principal ProtectionNoYesYesYesYes
Liquidity OptionsYesYesYesNoNo
Maintain Control of AssetYesYesYesNoNo
Tax-DeferralYesYesYesNoNo
Guaranteed RateNoNoYesNoNo
Guaranteed IncomeYesYesYesYesYes
Cost of Living Adjustments (COLA)YesYesNoYesYes
Death BenefitYesYesYesYes/NoYes/No
LTC EnhancementsYesYesYesNoNo

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Annuities vs CDs

Fixed annuities work very much like a certificate of deposit (CD) but are typically higher than CD rates. 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 Annuities

 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.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.

The Federal Reserve and Annuity Rates

Federal Reserve Building

Current annuity rates often mirror the interest rates available in bonds. When bond rates increase, annuity rates usually go up as well.

Annuity rates are influenced by 10 Year Treasury rates because insurance companies invest a lot of their money in high-quality 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.

Last week’s data showed that US consumer prices are rising at the fastest pace since the early 1980s. This has led to speculation that the Federal Reserve will raise interest rates by 0.5% at its next meeting.

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.

If that holds true annuity rates will likely continue to go up 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

Nationwide Secure Growth 5
Fixed Annuity

Nationwide Secure Growth 5

The Nationwide Secure Growth 5 Annuity is an individual, single-purchase payment, deferred fixed annuity designed for long-term savings.

North American Guarantee Plus 5 Annuity Brochure Cover
Fixed Annuity

North American Guarantee Plus 3

North American Guarantee Plus Annuity can help protect your retirement savings, while also offering the potential for higher interest rates.

Best Annuity Rates in White Text Over a Picture of $100 Bill Under UV Light
Fixed Annuity

Best Annuity Rates for September 2022

Compare today’s current annuity rates including guaranteed annuity rates, immediate, fixed indexed, and premium bonus annuities.

What is a Fixed Annuity?

A fixed annuity is an insurance product that pays out a guaranteed rate of return for a set period of time.

For example:

If you buy a 5-year fixed annuity your annuity rate is set for a five-year period, and a new interest rate is declared at the end of that period.

The fixed annuity contract will explain whether, how, and when this can happen. Although the word “fixed” might suggest otherwise, the interest rate on a fixed annuity can change over time.

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,

Fixed Annuity Pros and Cons

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 equity-type returns  
  • Limited Liquidity
  • Annuity rates may not keep up with inflation

How are Annuities Taxed?

Under current federal law, annuities receive special tax treatment. With a deferred annuity, you don’t have to pay taxes on the interest it earns until you withdraw the money.

An advantage of tax deferral is your earnings don’t count towards your taxable income giving you the option to defer paying taxes until you are in retirement and likely at a lesser marginal tax rate.

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 that is not purchased with tax-advantaged funds, such as from a 401(k) or IRA.

You will only pay tax on your earnings with you withdraw your money.

Frequently Asked Questions

Fixed annuities are not insured by the FDIC. Instead, they are backed 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.

The best-fixed annuity rate today is 4.75% available in a 10-year annuity; 4.65% for a 5-year annuity, 4.20% for a 3-year fixed annuity, and 3.55% for a 2-year annuity (as of September 11h, 2022.).

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