Will Annuity Rates Continue to Go Down in 2026?
Annuity rates are holding near multi-year highs in March 2026 — but the window may not stay open much longer. The Federal Reserve has held its benchmark rate at 4.25%–4.50% through the first quarter of 2026, keeping fixed annuity yields elevated. The best 5-year MYGA rates today sit at 6.30%, roughly double what they were in 2021.
The short answer to “are annuity rates going up or down?” is this: rates are likely near their peak. Economists broadly expect the Fed to cut 1–2 times in 2026, which would gradually pull annuity yields lower. If you’re considering locking in a rate, now may be the right time — before insurers begin adjusting downward.
Where Annuity Rates Stand Right Now (March 2026)
Here are today’s best available MYGA rates, updated live:
Rates shown are for informational purposes only and subject to change without notice. Products marked SI use simple interest — effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) funds. Always verify current rates with a licensed annuity professional before purchasing.
Rates updated daily. See the full rate comparison table →
For comparison: a 5-year MYGA averaged just 2.50%–3.00% in 2021. The jump to 6.30% today represents a fundamental shift in what retirees can earn safely on their savings.
What the Federal Reserve Is Doing — and Why It Matters
The Federal Reserve sets the federal funds rate, which directly influences the bond market. Since insurance companies invest most of their premium income in U.S. Treasuries and high-grade corporate bonds, when bond yields fall, so do annuity rates — usually within 60–90 days.
Here’s the recent Fed timeline:
- 2022–2023: Fed hiked aggressively — rates went from near 0% to 5.25%–5.50%
- Late 2024: Fed cut three times (September, November, December) — a total of 75 basis points
- January 2026: Fed held at 4.25%–4.50%
- February 2026: Fed held again — cited persistent inflation and a resilient jobs market
- March 19, 2026: Fed held for the third straight meeting
The Fed’s “hold” posture has been a gift to annuity buyers. Every month rates stay elevated, insurers can keep offering yields above 5%–6%. But the Fed’s own Summary of Economic Projections (“dot plot”) suggests at least one cut is coming in 2026.
Are Annuity Rates Going Up in 2026?
Unlikely. Annuity rates going meaningfully higher would require the Fed to resume raising rates — something few economists expect. The current environment of paused cuts has stabilized rates, but it hasn’t pushed them higher.
The 10-year U.S. Treasury yield, which tracks closely with long-term annuity rates, has traded in the 4.20%–4.50% range in early 2026 — you can track it live on the FRED 10-Year Treasury Constant Maturity Rate chart from the St. Louis Fed. For rates to rise from here, you’d need a significant inflation resurgence or a new economic shock — possible but not the base case.
Bottom line: Don’t wait for rates to go higher. The current plateau is likely the peak of this rate cycle.
Are Annuity Rates Going Down in 2026?
Yes — gradually. The trajectory for the rest of 2026 points lower, not higher. Here’s what will drive rates down:
- Fed cuts: Markets are pricing in 1–2 cuts totaling 25–50 basis points by year-end 2026. Each cut will pressure Treasury yields, and insurers will follow with lower crediting rates.
- Carrier competition: As rates stabilize, some carriers will trim margins slightly. We’ve already seen a handful of carriers reduce their MYGA offerings by 10–25 basis points in Q1 2026.
- Slowing bond yields: The 10-year Treasury has already pulled back from its late-2023 peak above 5%. If it continues toward 4.00%, annuity rates will follow.
The decline won’t be a cliff drop — more like a slow drift. But if you’re waiting for rates to spike again before buying, you may be waiting through an extended period of lower yields.
Top 3-Year MYGA Rates — March 2026
Three-year MYGAs offer a shorter commitment and solid yields. Good for someone who wants safety but isn’t ready to commit to 5+ years.
Rates shown are for informational purposes only and subject to change without notice. Products marked SI use simple interest — effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) funds. Always verify current rates with a licensed annuity professional before purchasing.
Top 5-Year MYGA Rates — March 2026
Five-year MYGAs are the most popular term. They offer the best balance of yield, commitment length, and flexibility. These are the rates shoppers are looking at most right now.
Rates shown are for informational purposes only and subject to change without notice. Products marked SI use simple interest — effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) funds. Always verify current rates with a licensed annuity professional before purchasing.
Example: Robert, age 64, invests $200,000 in a 5-year MYGA at 6.30%. After 5 years, his guaranteed balance is $268,400 — a gain of $68,400 with zero market risk.
Top 7-Year MYGA Rates — March 2026
Seven-year MYGAs lock in rates at or near the 5-year level, giving you an extra two years of guaranteed income without a meaningful rate penalty. Good for someone who wants the longest possible lock-in before rates fall.
Rates shown are for informational purposes only and subject to change without notice. Products marked SI use simple interest — effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) funds. Always verify current rates with a licensed annuity professional before purchasing.
How Annuity Rates Are Set (The Short Version)
Insurance companies don’t make up their crediting rates. They’re driven by what companies earn on the bonds they buy with your premium. Here’s the chain:
- The Fed sets the overnight lending rate
- That influences Treasury yields across all maturities
- Insurers invest most of your premium in 5–10 year Treasuries and corporate bonds
- Their portfolio yield minus operating costs and profit margin = your annuity rate
That’s why a 5-year MYGA rate tracks closely with the 5-year Treasury. When the 10-year Treasury yields 4.30%, insurers can offer 5.50%–6.30% on 5-year MYGAs because they’re adding a spread from corporate bonds in their portfolio. Investopedia’s MYGA explainer walks through the mechanics in more detail if you want the full picture.
When the Fed cuts, Treasury yields drop, bond prices rise, and new money earns less. Insurers respond by lowering the rates they offer on new policies. Existing policyholders keep their locked-in rate — which is exactly why locking in now matters.
Should You Lock In a Rate Now?
For most conservative savers aged 55–70, yes — locking in a 5.45%–6.30% rate today makes sense. Here’s why:
- Rates are near a cycle peak. We haven’t seen these yields since the mid-2000s. The odds favor lower rates 12–18 months from now.
- Safety matters more at this stage. A guaranteed 6.30% for 5 years beats a savings account or money market fund that resets every 30–90 days.
- Tax deferral compounds the advantage. Unlike CDs, annuity growth isn’t taxed until withdrawal — meaning your full balance compounds year over year.
- You’re not locked in completely. Most MYGAs allow 10% annual free withdrawals, so you retain some liquidity even in a locked-rate product.
The one reason to wait: if you’re close to a major liquidity need (within 12 months), don’t tie up principal in a MYGA. Otherwise, the math strongly favors locking in now.
Get a personalized annuity rate quote — no obligation →
Annuity Rates vs. CD Rates in 2026
CD rates have dropped faster than annuity rates. The best 5-year bank CDs as of March 2026 are paying around 4.50%–4.75% — compared to 6.30% on a 5-year MYGA. That’s a meaningful gap, especially when you add in the annuity’s tax deferral advantage.
| Feature | 5-Year MYGA | 5-Year CD |
|---|---|---|
| Top rate (March 2026) | 6.30% | ~4.60% |
| Tax treatment | Tax-deferred growth | Taxed annually (1099-INT) |
| FDIC insured? | No (state guaranty association) | Yes (up to $250K) |
| Annual free withdrawal? | Yes — up to 10%/year | Only on maturity or penalty |
| Growth on $200K over 5 years | ~$68,400 | ~$48,300 (pre-tax) |
The FDIC protection is real — but so is the rate advantage. Most states protect annuity holders through the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA), typically up to $250,000 per carrier. For most retirees splitting funds across 2–3 carriers, the protection is equivalent. Learn more: Annuity FAQ — common questions answered.
Annuity Rate Forecast: Rest of 2026
Our outlook for the remainder of 2026:
- Q2 2026 (April–June): Rates hold relatively steady. The Fed is in “wait and see” mode. Expect top 5-year MYGA rates in the 5.75%–6.30% range.
- Q3 2026 (July–September): Possible first Fed cut. If the Fed cuts 25bps, expect annuity rates to drift 15–25bps lower over the following 60–90 days.
- Q4 2026 (October–December): If the Fed cuts again, 5-year MYGA rates could slip below 5.50% by year end. Still historically strong, but a noticeable pullback from today’s peaks.
This is a forecast, not a guarantee. If inflation re-accelerates or the jobs market weakens dramatically, the Fed could surprise in either direction. But the base case is a gradual decline, not a collapse.
Frequently Asked Questions
Are annuity rates still going up in 2026?
No. Annuity rates have largely plateaued after their 2022–2024 rise. With the Fed holding rates steady and signaling eventual cuts, the more likely direction is a gradual drift lower — not higher.
What is a good annuity rate right now?
As of March 2026, a good rate depends on your term. For 3-year MYGAs, 5.00%+ is strong. For 5-year MYGAs, 5.50%+ is solid — and top rates are currently reaching 6.30%.
How often do annuity rates change?
Carriers typically update rates weekly or when they hit key business triggers (e.g., bond yield moves). Rates on policies already issued are locked in and never change — only new applications are affected by rate adjustments.
Should I wait for higher annuity rates?
Most financial planners would say no. Rates today are near their highest levels in 15+ years. Waiting for rates to go higher means giving up guaranteed earnings today for an uncertain gain tomorrow — and missing the compounding that starts the day you fund a policy.
What happens to my annuity if the Fed cuts rates?
Nothing — if you’ve already locked in a rate. Your guaranteed rate is fixed for the full term of the policy. A Fed cut only affects new policies written after the rate adjustment. This is one of the biggest advantages of a MYGA: certainty regardless of what the market does.
