Best Fixed Annuity Rates For April 2024

Fixed Annuity Rates

Forbes Finance Council

Current Fixed Annuity Rates For Multi-year Guaranteed Annuities (MYGAs)

Best Fixed Rate Annuities for April 2024

Below are the highest fixed annuity rates and product guidelines for multi-year guaranteed annuities (MYGA). MYGAs are a category of fixed annuities that offer a guaranteed fixed rate of return for a set period of time, typically two to ten years. MYGAs do not have annual fees, however they are subject to a surrender charges, which is a penalty imposed on an annuity holder if they withdraw funds (above the free-withdrawal limits) from the annuity before the specified time period is over.

Fixed Annuity Rates

Annuity rates vary by state and can change daily. Receive the most up-to-date rates with Today’s MYGA Report.

Top Fixed Annuity Rates By Length

Listed below are the highest fixed annuity rates available by length. The length of a MYGA represents both the length of the contract and the guaranteed rate period. Fixed annuity rates can vary from state to state and change daily. Requesting Today’s MYGA Report above is the best way to ensure you are receiving the most accurate, up-to-date rates for your state. Scroll down to view all available fixed annuity rates.

Call 1-800-501-1984 for Purchasing Options

CompanyProductLengthMinimum PremiumInterest RateA.M. Best Rating
OceanviewHarbourview2 Years$80,0005.25%AQuote Calculator
Atlantic Coast LifeSafe Harbor3 Years$5,0005.90%B++Quote Calculator
NassauNassau Simple4 Years$5,0005.35%B++Quote Calculator
American LifeAmerican Classic5 Years$1,0005.83%B++Quote Calculator
Atlantic Coast LifeSafe Harbor6 Years$5,0005.62%B++Quote Calculator
NassauMYAnnuity7 Years$10,0005.65%B++Quote Calculator
EquitrustCertainty Select8 Years$10,0005.50%B++Quote Calculator
American NationalPassadium MYG9 Years$250,0005.45%AQuote Calculator
EquitrustCertainty Select10 Years$10,0005.60%B++Quote Calculator

All Fixed Annuity Rates

Select from the length menu to see the fixed annuity rates for specific terms. Rates and availability may vary by state. Request today’s MYGA report for state specific rates and product information. Call 1-800-501-1984 for purchasing options.

Fixed Annuity Rates Explained

Fixed annuity rates refer to the interest rate paid by an insurance company when you buy a fixed annuity. The interest rate is then applied to the entire account value each year. For example, if you invest $100,000 into an annuity earning a 3% fixed annuity rate each year for 10 years, your account would be worth approximately $134,935 at the end of 10 years.

You may notice an additional $4,935 in the account value. After all, 3% of $100,000 is $3,000, so why isn’t the account value $130,000 after 10 years? The reason for this is that fixed annuity rates are compounded annually. The account value is $103,000 after year one. You will then receive the 3% fixed annuity rate on $103,000 during year two, thus increasing the overall yield.

Overview of Multi-Year Guaranteed Annuities

Fixed Annuity Rates Today

A Multi-year guaranteed annuity is the insurance industries version of a bank CD. You give the insurance company a lump sum of money and that money receives a guaranteed interest rate for a set amount of years. There are no moving parts. This means there are never any changes to the fixed annuity rate and no surprises after your purchase.

Multi-year guaranteed annuities are a subcategory of fixed annuities. They guarantee a fixed annuity rate for the entire duration of the contract. MYGAs most closely resemble the structure of a bank CD, though there are significant differences between the two. MYGAs are available with contract lengths as short as one year, up to as long as ten years. The top current fixed annuity rates are between 4.60% and 5.65%.

What happens at the end of the annuity contract?

The policy owner has several options at the end of the contract. They can take the money in a lump sum, reinvested into another annuity, or keep it in place and receive the renewal rate. In most cases, you have 30 days to inform the insurance company of your intentions. If you don’t give any instructions to the insurance company, then the annuity will automatically renew at the fixed annuity rates available at that time.

Comparing MYGAs to Traditional Deferred Annuities

Multi-Year Guaranteed Annuities are technically deferred fixed annuities. However, there are differences between MYGAs and traditional deferred annuities. The key distinction between the two is the terms of the guaranteed rate.

The fixed annuity rates of MYGAs are guaranteed for the full contract term. A seven year MYGA with a fixed annuity rate of 6% will guarantee that rate for all seven years. Traditional deferred Fixed annuities offer similar (often slightly higher) fixed annuity rates, however the rate can change up or down after the first year.

MYGAs vs. Bank CDs

The overall structure of MYGAs are similar to bank CDs and they share many features, such as a set interest rate. However, many differences exist that investors should be aware of when deciding between the two.

Annuities are sold by insurance companies

Perhaps the biggest difference is the fact that CDs are issued by banks and MYGAs are issued by insurance companies. This means that CDs are insured by the FDIC up to $100,000 for non-retirement accounts. Annuities are not FDIC insured, but they are safeguarded by individual state reserves. Annuity coverage varies state-to-state, ranging from $100,000 to $300,000.

Fixed Annuities Receive Tax Deferred Status

Rolling over an annuity to a different annuity does not trigger a tax-event. Using what’s known as a 1035 exchange, the MYGA annuity owner can transfer money from one annuity to another without showing an income. This is not possible with CDs, which generate income statements every year.

Accessing Your Funds

A third difference is that you can make partial withdrawals from a MYGA. Unlike a CD, a typical MYGA will allow you to withdrawal up to 10% of the initial investment annually. This feature is very desirable because it covers unexpected withdrawal needs. In contrast, liquidating even part of a CD requires you to cash out the whole policy and pay a sizable fee.

Other features of MYGA annuities include the ability to withdraw interest as monthly income and the 10% IRS tax penalty. The first is a positive, the second is a negative. Remember that all annuities are subject to a 10% tax penalty when liquidated prior to the age of 59.5.

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Fixed Annuity Rates

Choosing Between A Fixed Annuity And A Bank CD

The most important consideration is age. Are you retired or close to retirement? Are you near or over the age of 59.5? If so, annuities will out-perform CDs because of their tax-deferral benefits and more competitive rates. If you’re a younger investor, go with CDs to avoid the 10% tax penalty.

As for choosing between fixed and MYGA annuities, there’s really little difference. With near identical benefits, go with whichever annuity happens to offer the higher rate. Just keep in mind that fixed annuities don’t necessarily guarantee their rate for the full term.

Guaranteed Rates

MYGA Rates remain consistent throughout the entire policy.

No Fees

There are no fees for MYGAs unless it’s surrendered early.

Tax Benefits

Annuities offer tax deferred growth.

Principal Protection

Principal is guaranteed and protected.

Latest Fixed Annuity News

Surge in Annuity Sales: A 2023 Overview

Introduction

In recent times, the annuity market has witnessed a significant upswing. With investors increasingly focused on balancing growth potential with financial security, there’s a notable rise in the sales of various annuity products. Let’s break down what’s been happening in the annuity market in 2023, based on LIMRA’s U.S. Individual Annuity Sales Survey.

Record-Breaking Growth in Annuities

The total annuity sales climbed by 11% in the third quarter of 2023, reaching an impressive $89.4 billion. This growth is primarily attributed to the rebounding equity markets and a substantial rise in interest rates, enhancing the value proposition of annuities offered by insurance companies. Overall, sales in the first nine months rocketed to $270.6 billion, up 21% from the previous year.

Spotlight on RILA Sales

A standout performer in this upward trend is the Registered Index-Linked Annuity (RILA). These products have seen a quarterly record of $12.6 billion in sales, marking a 19% increase from last year. In total, RILA sales for the first three quarters of 2023 reached $34.4 billion, surpassing last year’s figures by 11%. With their dual promise of growth potential and protection, RILAs are becoming increasingly attractive to investors.

Growth Across Annuity Types Other annuity products have also seen substantial growth:

  • Fixed Indexed Annuities (FIAs) grew by 9% to $23.3 billion in the third quarter.
  • Single Premium Immediate Annuities (SPIAs) increased by 20%, reaching sales of $3 billion.
  • Deferred Income Annuities (DIAs) surged by an astonishing 88% in comparison to 2022’s third quarter.
  • Fixed-Rate Deferred (FRD) annuities also rose by 15%, with sales reaching $34.4 billion.

Income Annuities and Interest Rates

The rise in interest rates has particularly boosted income annuity products like SPIAs and DIAs. The higher rates enhance the attractiveness of these annuities, which promise regular income post-retirement.

Traditional Variable Annuities

Despite the general uptick, Traditional Variable Annuities (VA) have experienced a downturn. Sales in this category were down 7% in the third quarter and have decreased by 20% year-to-date compared to 2022. Although economic conditions are improving, traditional VAs haven’t kept pace with other annuity products this year.

Looking Ahead

According to LIMRA’s research, we’re likely to see continued growth in the annuity market, with RILAs and other fixed products potentially setting new sales records. The narrowing gap between Fixed-Rate Deferred annuity rates and CD rates, along with an overall more confident economic outlook, are prompting investors to consider annuities offering higher returns.

Conclusion

2023 has been a milestone year for annuity sales, with RILAs leading the charge. As the market evolves and interest rates influence product attractiveness, we’re witnessing a dynamic shift in investor preferences within the annuity landscape. This trend signifies a growing acknowledgment of annuities as a valuable component of retirement planning, offering a blend of security and growth potential in uncertain times.

Fixed Annuity Rates

Frequently Asked Fixed Annuity Rates Questions

The most commonly asked questions regarding multi-year guaranteed annuities with fixed annuity rates.

Do MYGAs allow withdrawals from my annuity?

Most fixed annuities allow a specified amount to be withdrawn penalty-free. The allowable withdrawal amount will differ from company-to-company, so be sure to read the product specifics carefully. MYGA annuities allow penalty-free withdrawals of your earned interest or penalty-free withdrawals of 10% of your contract value each year.

What are the penalties for early surrender?

Multi-year guaranteed annuities have a surrender charge that declines over time. The surrender charge is as high as 10% in the first year. The surrender fee will decline each year. A surrender fee would be charged to any withdrawal greater than the penalty-free amount allowed by your specific annuity contract.