Availability in your home state (the issuing insurer must be licensed in the owner’s home state to sell the annuity to you).
Guaranteed interest rate (typically compounded; the rate can vary by your home state and by your purchase amount).
Issuer (carrier) rating (the AM Best rating reflects the insurer’s financial strength; lower-rated insurers often offer higher rates).
Product term (1 to 10 (sometimes up to 20) years earning the guaranteed rate; the term also matches the surrender-charge period).
Penalty-free withdrawals (interest only, a set percentage of account value, or none; for the same product, adding free withdrawals usually lowers the rate).
A 2-year fixed annuity (MYGA) is the shortest multi-year guaranteed annuity available, which makes it the closest annuity equivalent to a short-term CD. You lock a guaranteed rate for just two years, your principal is protected, and the interest grows tax-deferred until you withdraw.
What Is a 2-Year Fixed Annuity (MYGA)?
A 2-year fixed annuity locks a single guaranteed interest rate for a 24-month term. Because the commitment is so short, surrender charges run off quickly and the product behaves much like a CD – but with tax deferral on non-qualified money1 and, often, a rate premium because the issuing insurer earns a credit spread that banks do not.
Who Is a 2-Year Fixed Annuity For?
A 2-year MYGA fits money you want to keep safe and liquid-ish on a short horizon: cash earmarked for a near-term goal, the front rung of an annuity or CD ladder, or funds you want to park for two years at a guaranteed rate while you decide on a longer strategy. It is not the place for money you may need at a moment’s notice – keep an emergency reserve elsewhere.
2-Year Fixed Annuity vs. 2-Year CD: Which Pays More?
At 5.15% versus about 4.30% for the best 2-year CD, the 2-year MYGA pays a higher headline rate, and on non-qualified money the tax deferral widens the gap further – a tax-equivalent yield near 6.78% for many savers. The trade-off is liquidity: a CD can be broken for a simple interest penalty, while a MYGA uses surrender charges and possibly a market value adjustment2 if you exit early.
What Happens When the 2-Year Term Ends?
When the 2-year term ends you get a window (often 30 days) to withdraw without surrender charges, renew into a current term, 1035 exchange to another annuity, or annuitize. If you do nothing, many contracts auto-renew – sometimes at the guaranteed minimum rate – so always act on the maturity notice.
How We Source Our Rates
Rates are sourced from AnnuityRateWatch3 and refreshed every six hours across the full independent market – not a curated shortlist. Our editorial floor is B+ or higher by AM Best4; lower-rated products may appear in the full filterable table, always with the rating disclosed. Guarantees are backed by the claims-paying ability of the issuing insurer. State guaranty association limits apply and vary by state5. Not a bank product; not FDIC insured6.
Who Is Behind This Page?
Jason Caudill, MBA, is the founder of My Annuity Store and has spent his career helping clients protect retirement savings with annuities from top carriers. My Annuity Store is independent and not affiliated with any single carrier, so the rankings here reflect the full market, not one company’s lineup. My Annuity Store is 100% independent and licensed in 47 states.
Federal Deposit Insurance Corporation (FDIC) · how bank CD insurance differs from an annuity ↩
Browse Fixed Annuity Rates
Shop Interest Rates by Term
Compare fixed annuity and MYGA rates by guarantee term. Longer terms often pay higher rates but lock your money up longer, so match the term to when you’ll need the money.
Fixed Annuity Rates by Insurer Rating
Compare fixed annuity and MYGA rates grouped by the issuing insurer’s AM Best financial-strength rating. The strongest-rated carriers (A++ / A+) emphasize long-term safety, while some lower-rated insurers offer higher rates, so weigh both before you buy.
Annuity Rates by State
All 50 states + D.C. Annuity rates and product availability vary by state. Every insurer must be licensed where you live, and many carriers file different products and rates state by state. Choose your state for the best annuity (MYGA) rates available to you, plus state-specific tax treatment and guaranty coverage.
What is the best 2-year fixed annuity rate right now?As of July 18, 2026, the best 2-year fixed annuity rate is 5.15% from CL Life. Rates update daily and vary by state, age, and deposit amount, so use the live table above to see the current top 2-year rates.Is a 2-year fixed annuity better than a 2-year CD?On rate alone, top 2-year MYGAs usually pay about 1.0% to 1.75% more than the best 2-year CDs. The bigger advantage is tax deferral: CD interest is taxed every year, while annuity interest compounds tax-deferred until you withdraw. A CD offers FDIC insurance and easier early access, so the right choice depends on your timeline and tax bracket.Should I lock in a 2-year annuity rate now?No one can reliably time rates, but a fixed annuity locks your rate for the full 2 years no matter what the market does next. If you expect rates to fall, locking in now secures today's yield; if you expect them to rise, you may prefer a shorter term so you can reinvest sooner. Many buyers ladder several terms instead of betting everything on one rate call. Your time horizon usually matters more than market timing.How is a 2-year MYGA taxed?Interest compounds tax-deferred inside the contract, so you get no 1099-INT each year and owe ordinary income tax only when you withdraw. Withdrawing gains before age 59½ adds a 10% IRS penalty. You can keep deferring by renewing the contract or doing a tax-free 1035 exchange at the end of the term.Can I withdraw money before the 2-year term ends?Most contracts allow a penalty-free withdrawal of about 10% of the account value each year. Withdrawals above that during the term trigger a surrender charge, and sometimes a market value adjustment (MVA). Before age 59½, the IRS also adds a 10% penalty on the interest portion.What is a market value adjustment (MVA)?A market value adjustment applies only if you withdraw more than your penalty-free amount before the term ends. It can raise or lower your surrender value based on how interest rates have moved since you bought the contract: if rates have risen, the MVA reduces your early-withdrawal value; if rates have fallen, it can increase it. It does not affect your money if you stay within the free-withdrawal limit or hold the contract to the end of the 2-year term.What happens when my 2-year term ends?About 30 to 60 days before maturity the carrier sends a notice with your options: withdraw the full balance, renew at the carrier's new rate, 1035-exchange to a different carrier tax-free, or annuitize for income. If you do nothing, most contracts auto-renew at the renewal rate, which is rarely the best available, so it pays to compare before the window closes.What happens to my 2-year MYGA rate when it renews?Your contract does not keep its original rate after the term. The insurer sets a renewal rate for the next period, and auto-renewal is rarely the best deal on the open market. When your 2-year term ends, compare the renewal offer against current top rates and 1035-exchange to a stronger contract if one is available. We handle that paperwork for clients at no cost.Who should buy a 2-year fixed annuity?A 2-year MYGA fits savers who want a guaranteed, tax-deferred return and will not need the money during the term. It is popular for safe-money retirement dollars, as a rung in a MYGA ladder, and as a higher-yielding alternative to a 2-year CD for those over age 59½.How does a 2-year MYGA fit into an annuity ladder?An annuity (MYGA) ladder spreads your money across several terms so a portion matures on a staggered schedule. A 2-year contract is one rung in that ladder. As each rung matures you can reinvest at the then-current rate, which smooths out interest-rate risk and keeps part of your savings coming available at regular intervals instead of locking it all up for a single term.Are 2-year fixed annuities safe?Fixed annuities do not lose value to market swings. Your principal and rate are guaranteed by the issuing insurer and backed by your state's guaranty association, typically up to $250,000 per insurer. Buying from highly rated carriers (AM Best A- or better) and staying within your state's coverage limit keeps the risk low.Can I fund a 2-year MYGA with my IRA?Yes. A 2-year MYGA can hold Traditional IRA, Roth IRA, or 401(k) rollover money. Inside an IRA the tax deferral is redundant, but the guaranteed rate and principal protection are still useful for the fixed-income part of a retirement account. Required minimum distributions still apply to Traditional IRA funds.Do 2-year annuity rates vary by state or deposit amount?Yes. Carriers file different products and rates by state, and many pay a higher rate for larger deposits (often $100,000 or more). Your age can also affect availability. Use the table above with your state and amount to see the rates you actually qualify for.
2026 EDITION
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