Fixed Annuity Rates Explained for 2026

Current fixed annuity rates change frequently based on carrier pricing, interest-rate conditions, guarantee term, premium amount, and contract features. Multi-Year Guaranteed Annuities commonly offer different rates for 3-, 5-, 7-, and 10-year terms. Brokerage Consulting compares available carrier options during your consultation and reviews more than the headline rate, including surrender charges, free withdrawals, and financial strength.

A fixed annuity rate is the guaranteed interest rate credited by the insurance carrier for a stated period. In a MYGA, that period may be several years, such as 3, 5, 7, or 10 years. The rate is contractually stated, but the value of the offer depends on the term length, surrender schedule, withdrawal access, tax deferral, and carrier strength.

Fixed annuities are often compared with bank CDs because both offer predictable interest and principal protection, but they work differently. A fixed annuity grows tax-deferred and is issued by an insurance company, while a CD is issued by a bank. Annuities may offer competitive rates, but they can include surrender charges and are intended for longer-term retirement planning.

A MYGA, or Multi-Year Guaranteed Annuity, is a fixed annuity that locks in a guaranteed interest rate for a defined multi-year term. Common terms include 3, 5, 7, or 10 years. MYGAs are often used by conservative retirees and pre-retirees seeking tax-deferred growth, predictable returns, and principal protection without stock market exposure.

A traditional fixed annuity protects principal from market losses because it is not invested directly in stocks or mutual funds. However, withdrawals above permitted free-withdrawal amounts during the surrender period may trigger charges. Guarantees are also backed by the issuing insurance carrier’s financial strength and claims-paying ability, so carrier review is an important part of the selection process.

Before buying, review the surrender charge schedule, contract term, free withdrawal allowance, tax rules, income rider costs if applicable, and any restrictions on access to funds. Many fixed annuities do not charge a direct advisory fee to the client when placed through an insurance broker, but the broker may be compensated by the issuing carrier.

An older annuity may be eligible for a 1035 tax-free exchange into a newer contract, allowing accumulated gains to transfer without immediate taxation. This can be useful when an existing annuity has a below-market rate or outdated features. The analysis must compare surrender charges, new guarantee terms, carrier strength, liquidity access, and whether the exchange improves your overall position.

Fixed annuities may fit retirees, federal employees, CD shoppers, pension buyout recipients, inheritance recipients, or pre-retirees who want principal-protected, tax-deferred growth. They are generally not designed for short-term investing. A proper review considers your income needs, liquidity requirements, existing retirement accounts, tax status, and whether guaranteed growth supports your broader retirement plan.