North Dakota Annuity Rates
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.
Key Takeaways
- Near-zero state tax for most retirees: North Dakota’s top income tax rate is just 2.5%, and single filers earning under $44,725 pay 0% state income tax, meaning many retirees owe nothing on annuity distributions.
- Social Security is fully exempt: Since 2023, North Dakota no longer taxes Social Security benefits at the state level, reducing the overall tax burden for retirees with combined income sources.
- Above-average guaranty protection: North Dakota’s state guaranty association covers annuity contracts up to $300,000 per insurer, higher than the $250,000 standard in most states.
- No retirement income exclusion needed: With rates so low, ND doesn’t need a special pension exclusion, the ordinary rate itself is minimal compared to high-tax neighbors like Minnesota.
- Carrier availability is solid: North Dakota’s mid-sized insurance market means most major MYGA carriers are licensed here, giving buyers competitive rate options.
North Dakota Department of Insurance
The North Dakota Insurance Department licenses and regulates all annuity carriers doing business in the state. If you have a complaint about a carrier or agent, or need to verify a license, the department’s consumer division handles inquiries directly.
| Contact | Details |
|---|---|
| Agency | North Dakota Insurance Department |
| Consumer helpline | 1-800-247-0560 |
| Website | insurance.nd.gov |
| License verification | insurance.nd.gov/agent-lookup |
How North Dakota Taxes Annuity Income
North Dakota taxes annuity income as ordinary income at the state level, but the rates are now so low that the tax impact is minimal for most retirees, and zero for those in the lowest bracket.
| Annuity Type | North Dakota Tax Treatment | State Rate |
|---|---|---|
| MYGA / Fixed Annuity distributions | Taxed as ordinary income at ND rates | 0% – 2.5% |
| Interest earnings (non-qualified) | Deferred until withdrawal; taxed as ordinary income at distribution | 0% – 2.5% |
| IRA/401(k) annuity distributions | Taxed as ordinary income; no special exclusion, but a low rate applies | 0% – 2.5% |
| Social Security | Fully exempt from ND state income tax (since 2023) | 0% |
Tom, 66, retired in Bismarck after 30 years with the state highway department, he recently moved his CD into a multi-year guaranteed annuity after watching rates climb above 5% and realizing he’d owe almost nothing to the state on the income. North Dakota’s dramatic 2023–2024 income tax cuts now put most retirees at 0% or near zero on state taxes, making it one of the most annuity-friendly states in the Midwest.
Tips for Buying an Annuity in North Dakota
- Take advantage of the 0% bracket while you can: If your retirement income is modest, you may owe zero North Dakota state tax on annuity withdrawals. Structure withdrawals to stay under the $44,725 single-filer threshold for a 0% state rate. Pair this with federal bracket management, and the tax savings are substantial. Review the current fixed annuity rates to see how much tax-deferred interest you can accumulate first.
- Verify your agent is licensed in North Dakota: Before signing any annuity contract, confirm your agent holds a valid ND insurance license. The North Dakota Insurance Department’s online lookup tool at insurance.nd.gov makes this quick. An unlicensed agent has no regulatory oversight and offers you no consumer protections.
- Understand your guaranty association coverage: North Dakota’s state guaranty association protects annuity contracts up to $300,000 per insurer. If you’re investing more than that, consider splitting across two or more highly-rated carriers to maximize coverage.
- Compare MYGAs to CDs before you commit: With North Dakota’s near-zero income tax, the tax-deferral advantage of a MYGA is somewhat less dramatic than in high-tax states, but the rate itself is typically still higher than CDs at the same term. Run the numbers side by side before deciding. Many ND retirees still come out ahead with MYGAs even after accounting for the lower state tax impact.
- Request a free quote before you lock in: MYGA rates vary by carrier and change weekly. Don’t accept the first rate you see, request a personalized quote to see the current top rates available to North Dakota residents. A difference of even 0.25% on a $200,000 annuity adds up to thousands of dollars over a 5-year term. Learn how to buy an annuity to understand the full process before signing.
Frequently Asked Questions
Does North Dakota tax annuity withdrawals?
Yes, but at very low rates. North Dakota taxes annuity income as ordinary income, with rates ranging from 0% to 2.5% depending on your income level. Single filers earning under $44,725 pay 0% state income tax, which means many retirees owe nothing on their annuity distributions.
What is the annuity guaranty limit in North Dakota?
North Dakota’s guaranty association protects annuity contracts up to $300,000 per insurer, above the $250,000 standard in most states. This protection applies if a licensed carrier becomes insolvent, but it is not a government guarantee. Always choose financially strong carriers rated A or better by AM Best.
Is Social Security taxed in North Dakota?
No. Since 2023, Social Security benefits have been fully exempt from North Dakota state income tax. This applies regardless of your income level, and it took effect with tax year 2023 returns.
Are there specific annuity products available to North Dakota residents?
Most major national MYGA and fixed annuity carriers are licensed in North Dakota, so product availability is comparable to other Midwestern states. However, some smaller or newer carriers may not be licensed in ND. Always verify the carrier’s license status with the North Dakota Insurance Department before purchasing.
Compare Annuity Rates in Other Midwest States
Shopping for the best rate? Guaranty association limits, premium taxes, and available carriers vary by state. Compare rates in nearby states to find the best fit for your retirement plan.
- Best Annuity Rates in Kansas
- Best Annuity Rates in Minnesota
- Best Annuity Rates in Illinois
- Best Annuity Rates in Nebraska
- Best Annuity Rates in Indiana
- View All 50 State Rate Pages
You can also compare our current best fixed annuity rates or explore top 5-year MYGA rates nationwide.
