Best Fixed Annuity Rates Today

As of July 10th, 2024, the best fixed annuity rate is 6.50% simple interest offered by Ibexis in their 7-year annuity.

Fixed annuity rates are specified for a set period and are often referred to as a “CD Type Annuity” because of their similarities to a Certificate of Deposit.

Best Fixed Annuity Rates by Term

TermInsurerRateAnnuity AM BestApplication
2 Years Americo annuity logo
AMERICO
5.35%Platinum Assure 2AApply
3 YearsSecurity sentinel life logo
Sentinel Security
5.90%Personal ChoiceB++Apply
4 Years Americo annuity logo
AMERICO
5.50%Platinum Assure 4AApply
5 Years Ibexis annuity logo
Ibexis
6.30% SimpleMYGA PlusA-Apply
6 Years Nassau logo
Nassau
5.70%MYAnnuityB++Apply
7 Years Ibexis annuity logo
Ibexis
6.50% SimpleMYGA PlusA-Apply
8 Years Equitrust annuity logo
EquiTrust
5.50%Certainty SelectB++Apply
9 YearsAmerican national annuity logo
American National
5.35%Palladium MYGAAApply
10 Years Equitrust annuity logo
EquiTrust
5.60%Certainty SelectB++Apply

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

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Current Rates from A+ Rated Insurance Companies

CARRIERPRODUCTTERMRATEWITHDRAWAL
A++
Reliance Standard
Reliance Guarantee 77 yrs5.15%10%
A++
Reliance Standard
Eleos - MVA5 yrs5.15%10%
A+
North American
NAC Guarantee Plus5 yrs5.15%Interest only
1st yr: None
A++
MassMutual Ascend
SecureGain 77 yrs5.14%
to 4.94%
10%
A+
Protective
Protective Secure Saver7 yrs5.10%10%
A++
MassMutual Ascend
SecureGain 55 yrs5.10%
to 4.90%
10%

Best 3 Year Annuity Rates

The best 3 year fixed annuity rate is 5.90% offered by Sentinel Security, as of of July 10th, 2024.

TermAnnuity CompanyInsurer ProfileRateAnnuityAM BestApply Online
3 YearsSecurity sentinel life logoSentinel Security5.90%Security ChoiceB++Apply
3 Years Cl life annuity logo CL Life5.85%CL SundanceB++Apply
3 YearsAspida annuity logoAspida5.40%Synergy Choice 3A-Apply

Best 5 Year Fixed Annuity Rates

Ibexis has the best 5 year fixed annuity rate at 6.30% simple interest.

TermInsurerCompany ProfileRateAnnuityAM BestApply
5 Years Ibexis annuity logo Ibexis Life6.30% SimpleIbexis MYGA PlusA-Apply
5 Years Nassau logo Nassau5.70%MYAnnuityB++Apply
5 Years Americo annuity logo AMERICO5.65%Platinum AssureAApply

Best 7 Year Fixed Annuity Rates

Ibexis currently has the best 7-year fixed annuity rate offering 6.50% simple interest in their MYGA Plus 7-year annuity.

TermInsurerCompany DetailsRateAnnuityAM BestApply
7 Years Ibexis annuity logo Ibexis 6.50% SimpleMYGA PlusA-Apply
7 Years Nassau logo Nassau5.7%MyAnnuity 7B++Apply
7 Years Americo financial annuity logo AMERICO5.65%Platinum AssureAApply
7 YearsAmerican national annuity logoAmerican National5.45%Palladium MYGAApply

Best 10 Year Fixed Annuity Rates

EquiTrust currently has the highest 10 year fixed annuity rate offering a guaranteed annuity rate of 5.60% for 10 years.

TermInsurerCompanyAnnuityRateAM BestApplication
10 Years Equitrust annuity logo EquitrustCerrtainty Select5.60%B++Apply
10 YearsAmerican national annuity logoAmerican NationalPalladium MYG5.35%AApply
10 Years Oceanview life and annuity logo OceanviewHarbourview 5.30%AApply

How do Fixed Annuities Work?

Fixed annuities offer a guaranteed rate of return for a set period. For example, when you buy a 5-year annuity the annuity rate is guaranteed for 5 years.

To better understand annuities, let’s delve into their mechanics. Annuity contracts consist of two phases:

Infographic show two the stages of annuities: accumulation and distribution

Understanding the Types of Annuity Rates

Multi Year Guaranteed Annuity Rates

Multi-Year Guaranteed Annuity Rates (MYGA) are set for the length of your contract. Most annuities provide some liquidity but not all; so that is something to keep in mind.

Traditional Fixed Annuity Rates

Traditional fixed annuity rates do not guarantee a set interest rate for the entire length of the annuity contract. The first years rate is specified and a new rate is set on each anniversary.

Fixed Index Annuity Rates

Fixed index annuity rates combine elements of both fixed and variable annuities. They offer a minimum guaranteed interest rate, similar to fixed annuities, but also provide the potential for additional earnings based on the performance of a stock market index.

Types of annuities infographic.

How are Annuity Rates Established?

The rate of return on an annuity is a crucial factor to consider when choosing an annuity product. Annuity rates are typically based on several factors, including the age and health of the individual purchasing the annuity, and the length of the payout period.

One of the main factors that determine annuity rates is the current interest rate environment. In general, annuity rates tend to be higher when interest rates are higher since insurance companies can earn more on the deposits they receive from annuity purchasers.

Conversely, when interest rates are low, annuity rates may be lower as well.

Overall, the factors that determine annuity rates can be complex, and it’s important to carefully consider all of the factors involved before making a decision.

The Federal Reserve and Annuity Rates

Federal reserve building

Annuity rates are influenced by US Treasury rates because insurance companies invest much of their assets in high-quality bonds and U.S. Treasuries.

This is why current annuity rates often mirror the interest rates available in other fixed-income investments, primarily bonds and U.S. Treasuries. When bond rates increase, annuity rates usually go up as well.

The Federal Reserve signaled it would begin steadily raising interest rates in mid-March, 2022 in an effort toward removing stimulus to bring down inflation. The Federal Reserve has been raising the Fed funds rate since 2022 to combat high inflation, which peaked at 6.4% in January 2023.

However, as inflation falls back to the Fed’s 2% target and the economy slows down due to higher borrowing costs, the Fed is likely to pause its rate hikes by the summer of 2023 and start cutting them by the end of the year.

DateRate ChangeTarget Rate
March 15-16, 20220.25%0.25% - .5%
May 3-4, 20220.50%0.75% - 1%
June 14-15, 20220.75%1.5% - 1.75%
July 26-27, 20220.75%2.25% - 2.5%
Sept. 20-21, 20220.75%3% - 3.25%
Nov. 1-2, 20220.75%3.75% - 4%
Dec. 13-14, 20220.50%4.25% - 4.5%
Jan. 31-Feb. 1, 20230.25%4.5% - 4.75%
March 21-22, 20230.25%4.75% - 5%
May 2-3, 20230.25%5% - 5.25%

Are Annuity Payments Taxed?

The interest you earn in an annuity grows tax-deferred, which means you don’t have to pay taxes on the interest your annuity earns until you make a withdrawal from your annuity. Generally speaking, earnings from annuities are taxed at your ordinary income tax rate using the LIFO (last in, first out) method.

Ultimately, the manner in which your annuity earnings will be taxed depends on the type of funds you use to purchase the annuity.

Below is an example showing how tax deferral could increase your earning power. Consider someone whose Federal Tax bracket is 32% owns an annuity that earns 4.50%To match those same earnings in a taxable investment they would have to earn 6.62% instead.

Under current law, annuities grow tax deferred. An annuity is not required for tax deferral in qualified plans. Annuities may be subject to taxation during the income or withdrawal phase. Neither My Annuity Store, Inc. nor any financial professionals acting on its behalf, should be viewed as providing legal, tax, or investment advice. You should be advised to rely on your own qualified tax professional.

Best Fixed Annuity Companies

In 2023, fixed-rate deferred annuity sales totaled $164.9 billion, up 46% from the 2022 annual high of $113 billion. Fxed-rate deferred annuity sales were $58.5 billion in the fourth quarter, this is the best sales quarter for fixed-rate deferred annuities ever documented.

Each year the Secure Retirement Institute publishes a U.S. Individual Fixed Annuity Sales Survey which lists the top 20 Annuity Companies ranked by the dollar amount of individual U.S. Fixed Annuity Sales.

The table below lists the top 10 best-fixed annuity companies in order by sales(in thousands).

RankInsurerSales
1Athene $23,898,950
2Mass Mutual $17,222,541
3Corebridge $17,222,541
4New York Life $9,307,837
5Global Atlantic $7,405,572
6Western Southern $6,368,639
7Symetra $5,688,989
8Fidelity & Guaranty $5,055,158
9Delaware Life $4,445,059
10Pacific Life $4,122,429

Annuities vs CDs

Fixed annuities are very similar to a certificate of deposit (CD); annuity rates are higher than CD rates; generally speaking.

FEATURESFIXED 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.

Why Should You Buy an Annuity?

Annuities come with unique features that make them an attractive option for retirement planning. They offer tax-deferred growth, meaning you don’t have to pay taxes on the earnings until you withdraw the money.

Additionally, annuities can be customized to suit your preferences, offering choices in payout options and even providing death benefits for your beneficiaries.

Key Features and Characteristics of Fixed Annuities

Annuities offer several benefits that make them worth considering for retirement planning. Here are some compelling reasons to buy an annuity:

Retirement Income Stability

One of the primary advantages of annuities is their ability to provide a stable income stream during retirement. By opting for a lifetime income option, you can rest assured that you’ll have a consistent source of income to cover your living expenses, regardless of how long you live. This stability can help alleviate concerns about outliving your savings and provide peace of mind in retirement.

Tax Advantages

Annuities offer tax advantages that can be beneficial for retirement planning. During the accumulation phase, your contributions grow on a tax-deferred basis, meaning you don’t pay taxes on the earnings until you start withdrawing the money. 

This tax deferral allows your investment to potentially grow faster compared to taxable investments. However, it’s important to note that withdrawals from annuities are subject to ordinary income tax.

Investment Control and Flexibility

Depending on the type of annuity you choose, you may have control over how your contributions are invested. Variable annuities, for example, allow you to allocate your funds among different investment options. This flexibility enables you to potentially earn higher returns by taking advantage of market opportunities.

Death Benefit for Beneficiaries

Annuities can provide a death benefit to your beneficiaries. If you pass away before receiving the full value of your annuity, a death benefit can be paid out to your loved ones. This ensures that your contributions and any accumulated earnings are not lost and can be passed on to your heirs.

Now that you understand the benefits of annuities, let’s discuss how and where you can purchase one.

Where Can You Buy Annuities?

There are various avenues through which you can buy annuities. Here are some common options to consider:

  • Insurance Companies and Financial Institutions. Insurance companies are the primary providers of annuities. They offer a range of products and can guide you through the selection process. Additionally, many financial institutions, such as banks and credit unions, also offer annuities as part of their investment offerings.
  • Independent Financial Advisors. Working with an independent financial advisor can be beneficial when buying annuities. These professionals have in-depth knowledge of different annuity products in the market and can help you find the one that aligns with your retirement goals and risk tolerance. They provide personalized advice and recommendations tailored to your specific needs.
  • Online Annuity Marketplaces. Online annuity marketplaces have emerged as a convenient option for purchasing annuities. These platforms allow you to compare annuity rates for many different annuity products, access customer reviews, and get quotes from multiple providers. However, it’s crucial to ensure that the online marketplace is reputable and trustworthy before making any financial decisions.

Tips for Getting the Best Annuity Rates

When shopping for annuities, keep the following tips and guidelines in mind:

Assess Your Retirement Needs

Before purchasing an annuity, evaluate your retirement goals and financial situation. Consider factors such as your desired income level, estimated retirement expenses, and the length of time you expect to need income from the annuity. This assessment will help you determine the type of annuity and payout option that best aligns with your retirement objectives.

Review all Annuity Rates, Fees, and Charges

Annuities often come with various fees and charges, including annual maintenance fees, surrender charges for early withdrawals, and investment management fees for variable annuities. Make sure you understand the fee structure associated with the annuity you’re considering and how it may impact your overall returns.

Consider How and When You’ll Withdraw Your Funds

Decide which type of payment options are available for the annuity. Consider whether you prefer a fixed payment amount, inflation-adjusted payments (COLA), or a lifetime income stream.

Additionally, explore any optional income riders that can enhance the annuity’s features, such as long-term care benefits or guaranteed minimum withdrawal benefits. Assess these options based on your specific needs and priorities.

Compare Annuity Companies

Compare factors such as financial strength reputation, customer service, and the variety of annuity products they offer. Look for providers with a solid track record, positive customer reviews, and a strong financial standing to ensure the reliability and stability of your annuity.

Now that we have covered the tips and guidelines for shopping annuities, let’s discuss the pros and cons associated with these financial instruments.

Pros and Cons of Annuities

As with any investment product, annuities have their advantages and disadvantages. Let’s explore both sides to help you make an informed decision:

PROS

  • Steady Retirement Income: Annuities offer a reliable income stream, providing a sense of financial security during retirement.
  • Tax Advantages: The tax-deferred growth of annuities can lead to faster accumulation of wealth and potentially lower tax liability.
  • Investment Options: Variable annuities allow for investment control and the potential to earn higher returns based on market performance.
  • Death Benefit: Annuities can provide a death benefit, ensuring that your contributions and earnings are passed on to your beneficiaries.

CONS

  • Lack of Liquidity: Annuities are long-term investments, often imposing penalties for early withdrawals. Make sure to consider your liquidity needs before committing to an annuity.
  • Fees and Charges: Annuities can come with various fees, including administrative fees, mortality, and expense charges, and investment management fees. These costs can affect the overall returns of the annuity.
  • Loss of Control: Annuities limit your access to the invested funds, potentially restricting your ability to make other investment choices.
  • Complexity and Transparency: The terms and conditions of annuities can be complex, making it important to fully understand the details of the contract before making a purchase.

Frequently Asked Questions (FAQs)

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 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 locked in for the initial 5 year contract period and you agree to keep the annuity for the 5 year contract term.

A $1,000,000 dollar annuity would pay you approximately $6,146 per month for the rest of your life if you purchased the annuity at age 65 and began taking payments immediately.

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Upcoming Rate Changes

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07/15/2024
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