Best Annuity Rates in Indiana: 2026 Rate Table
These rates reflect top offers from A-rated carriers currently available to Indiana residents. Rates move with the broader interest rate environment, so the figures below represent a snapshot as of March 2026.
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.
A multi-year guaranteed annuity (MYGA) locks in the rate shown above for the full term, no resets, no index-linked variability. You know exactly what you’ll have at maturity. That predictability is the core appeal for retirees who lived through 2022’s market downturn and don’t want a repeat.
How Indiana Regulations Affect Your Annuity Rate
Indiana charges insurance carriers a premium tax of 1.3% on annuity premiums collected in the state. That may sound like a rounding error, but it matters when you’re comparing states. Illinois, for example, charges 0.5%, but Indiana’s overall regulatory framework is considered carrier-friendly, which keeps a competitive pool of insurers active in the market.
The practical result: Indiana residents generally see rates that are competitive with national averages. When a carrier calculates what rate it can offer, it factors in premium tax, operating costs, and the credit spread it earns on its investment portfolio. A lower premium tax leaves more room for a higher credited rate to the policyholder.
The Indiana Department of Insurance (IDOI) regulates annuity sales and requires carriers to comply with suitability standards. All agents selling annuities in Indiana must be licensed, and annuity products must be filed and approved before sale. Indiana also follows the NAIC Suitability in Annuity Transactions Model Regulation, which means your agent is required to document that the product fits your financial situation.
Your Indiana policy also includes a 10-day free look period. If you change your mind within 10 days of receiving your contract, you can return it for a full refund of the premium, no questions asked.
Client Example Annuities in Indiana
Indiana retirees are in a favorable position when it comes to fixed annuities. The state’s low premium tax (1.3%) helps carriers pass better rates through to policyholders, and a flat income tax rate of 3.15% keeps the tax bite on withdrawals manageable, especially compared to neighboring Illinois and Michigan. If you’re sitting on maturing CDs or a pension lump sum in 2026, this is a market worth taking seriously.
Take Dave, 64, a retired Indianapolis auto parts manufacturer with $195,000 in maturing CDs. Renewing at his bank’s current 4.1% CD rate means leaving roughly $280 per year on the table compared to what top-rated carriers are offering in Indiana right now. A 5-year fixed annuity at 5.60% nets him $10,920 in guaranteed interest in year one alone, and defers the tax bill until he’s ready to withdraw.
Indiana Life and Health Insurance Guaranty Association
The Indiana Life and Health Insurance Guaranty Association (ILHIGA) provides a safety net for Indiana annuity owners if a licensed insurance company becomes insolvent. Coverage applies to fixed annuity contracts up to $250,000 in present value per insured person, per insolvent insurer.
This protection is not insurance you buy, it’s automatic for any annuity purchased from a company licensed to do business in Indiana. The $250,000 limit applies to the combined value of all annuity contracts you hold with the same carrier, so if you have two policies with the same company totaling $400,000, only $250,000 is protected.
The practical workaround is straightforward: split large premiums across two A-rated carriers. Instead of placing $400,000 with one insurer, place $200,000 with Carrier A and $200,000 with Carrier B. Both amounts fall within the guaranty limit, and you retain full coverage on both.
For a complete explanation of how the state backstop system works nationally, see our guide to state guaranty associations. It’s an underappreciated layer of protection that most retirees never think about until they need it.
One important note: guaranty association coverage is not a substitute for buying from financially strong carriers in the first place. My Annuity Store only displays rates from carriers with AM Best ratings of A- or better. A strong rating means the probability of insolvency is very low, the guaranty association is the last line of defense, not the primary one.
Annuity Tax Treatment in Indiana
Indiana uses a flat income tax rate of 3.15% for 2026, one of the most straightforward state tax structures in the country. Annuity withdrawals are treated as ordinary income and taxed at that flat rate. There’s no graduated bracket system to navigate and no retirement income exclusion that exempts annuity distributions from state tax.
The complicating factor is the county income tax. Indiana is one of the few states that levies a separate county-level income tax on top of the state rate. County rates vary widely: Marion County (Indianapolis) adds 2.02%, Hamilton County adds 1.10%, and Hendricks County adds just 0.90%. On $30,000 of annual annuity income, the difference between a low-rate and high-rate county can be $300 or more per year.
Here’s how the math looks for Dave in Indianapolis. He withdraws $25,000 annually from his annuity. Indiana state tax at 3.15% = $787. Marion County tax at 2.02% = $505. Total state and county tax: $1,292, an effective combined rate of 5.17%. That’s still well below what he’d owe in many other states, but it’s worth knowing your county’s specific rate before projecting your retirement cash flow.
For non-qualified annuities (funded with after-tax dollars), only the earnings portion of each withdrawal is taxable, the return of your original premium is not. This is called the exclusion ratio. A tax advisor can calculate the taxable percentage based on your contract specifics.
Annuities inside an IRA or 401(k) rollover are subject to Indiana income tax on the full withdrawal amount, since the original contributions were pre-tax. Required minimum distributions (RMDs) beginning at age 73 will be fully taxable at Indiana’s ordinary income rate.
How to Buy an Annuity in Indiana: Step by Step
- Define your goal and time horizon. Are you protecting a CD rollover for 3–5 years while earning more interest? Or building a guaranteed income stream for life? The answer determines whether a fixed MYGA or an income annuity is the right fit. Dave’s goal is principal protection and rate maximization on his $195,000, a 5-year MYGA is the logical choice.
- Compare rates from multiple A-rated carriers. Rates vary by 0.25%–0.75% across carriers for the same term. On a $195,000 premium, a 0.50% rate difference equals $975 per year in interest. Use the current fixed annuity rates table to see who’s offering the best rate right now.
- Understand the surrender charge schedule. Fixed annuities have surrender charges if you withdraw more than the free withdrawal amount (typically 10% per year) during the surrender period. A 5-year MYGA typically has a 5-year declining surrender charge, for example, 8%, 7%, 6%, 5%, 4% in years 1–5. If Dave needs all his money in year 2, he’d face a charge. Make sure the term fits your liquidity plan.
- Apply through a licensed Indiana agent or broker. You can get a free quote and connect with a licensed agent through My Annuity Store. The application process takes 20–30 minutes and is typically completed electronically. Most carriers issue the contract within 7–10 business days. Your premium is held in a separate account during underwriting.
- Review your contract during the free look period. Indiana law gives you 10 days after receiving your contract to review it and cancel for a full refund if anything doesn’t match what you were quoted. Read the contract carefully, verify the rate, term, surrender charge schedule, and any riders attached. If something looks off, call your agent or contact the IDOI at (317) 232-2385.
Want a more detailed walkthrough? Our guide on how to buy an annuity covers every step from rate shopping to signing the contract.
Frequently Asked Questions About Annuities in Indiana
Are annuity rates in Indiana competitive with national averages?
Yes, Indiana’s low 1.3% premium tax is one of the lowest in the Midwest, which helps carriers offer competitive rates to Indiana residents. You’ll typically see rates within 0.10%–0.20% of the national top rates. The pool of A-rated carriers active in Indiana is large, so competition keeps rates healthy.
How does Indiana’s county income tax affect annuity distributions?
Indiana’s county income tax is charged on top of the 3.15% flat state rate. Rates range from 0.50% in some rural counties to over 3% in a few urban areas. Marion County (Indianapolis) charges 2.02%, making the combined rate roughly 5.17%. If you live in Hamilton or Hendricks County, the combined rate is lower. Know your county’s rate and factor it into your withdrawal projections.
Is my annuity protected if the insurance company fails?
Indiana annuity owners are protected by the Indiana Life and Health Insurance Guaranty Association up to $250,000 per insolvent insurer. If you have more than $250,000 to invest, split the premium across two carriers to keep each policy within the coverage limit. My Annuity Store only works with A-rated carriers, reducing the likelihood of insolvency in the first place.
Can I move an existing CD or IRA into an annuity without a big tax bill?
Yes, with planning. A direct IRA-to-annuity transfer is a tax-free trustee-to-trustee transfer, no Indiana or federal tax due at the time of the move. A CD rollover involves paying any early withdrawal penalty to the bank, but there’s no additional tax event until you withdraw from the annuity. The annuity’s tax-deferred growth then compounds without annual tax drag, which is especially valuable in Indiana, given the county tax layer.
