Best Fixed Annuity Rates for July 2026

What are Annuity Rates?

The term "annuity rate" can mean several different things depending on the product, the credited interest rate on a fixed annuity, the cap, participation, or spread rate on an FIA or RILA, the withdrawal and benefit base growth rate on a GLWB rider, or the payout rate on an income annuity.

Mixing them up is one of the most common points of confusion when people start shopping. Throughout this guide, "annuity rate" refers to the credited interest rate on a fixed or multi-year guaranteed annuity unless stated otherwise.

Today's Best Annuity Rates

The table below highlights today's best MYGA rates across common term lengths, along with AM Best ratings for each carrier. Rates shown are limited to carriers with an AM Best rating of B++ (Good) or better.

Types of Annuity Rates Explained

Not every annuity rate works the same way. The product type you choose determines how your rate is set, whether it can change, and how much risk is involved. Here’s a practical rundown of the four main categories.

Fixed Annuity Rates

Fixed annuities come in several forms, the most common being Multi-Year Guaranteed Annuities (MYGAs). A fixed annuity rate is locked at purchase and guaranteed for the entire contract term. Your premium earns a set percentage year after year, regardless of what interest rates or equity markets do while the contract is active.

Multi-Year Guaranteed Annuities, MYGAs, are the most popular product in this category, and for good reason. They work very much like a CD issued by an insurance company: you deposit a lump sum, choose a term (usually two to ten years), and receive a guaranteed rate for that full period. The interest compounds tax-deferred, which gives MYGAs a meaningful edge over bank CDs for money held outside a retirement account.

As of June 2026, top MYGA rates from A-rated carriers range from roughly 5.00% on a two-year contract to 5.65% on a seven-year term. Rates from lower-rated insurers can reach 7.65% on 10-year products, but those come with trade-offs worth understanding before you commit.

Fixed Index Annuity Rates

Fixed index annuities (FIAs) credit interest based on the performance of an external index like the S&P 500, subject to a cap and a floor. The cap sets a ceiling on what you can earn in any given period; the floor ensures you never lose principal even when the index declines.

Cap rates and participation rates are not guaranteed fixed rates. They reset periodically and take more work to evaluate. A FIA advertising a 7% cap rate might sound attractive, but actual credited interest will vary based on the performance of the underlying index. These products serve a different purpose than MYGAs and deserve a separate analysis before you compare them side by side. Registered Index-Linked Annuities (RILAs) sit between FIAs and variable annuities, offering more growth potential than FIAs but with some downside risk.

Immediate Annuity Payout Rates

Unlike fixed, FIA, and variable deferred annuities, immediate annuities work differently. A Single Premium Immediate Annuity (SPIA) converts a lump sum into a guaranteed income stream that typically starts within 30 days of purchase. The payout rate isn’t a pure interest rate, it blends interest earnings with a return of your principal across your expected lifetime.

Payout rates that are life contingent are heavily driven by age and gender because they’re built on actuarial life expectancy tables. A 75-year-old receives a higher monthly payout per premium dollar than a 65-year-old because the payment period is expected to be shorter. Current SPIA payout rates remain historically attractive in this rate environment.

Variable Annuity Rates

Variable annuities invest premiums in sub-accounts that function like mutual funds. Returns move with the market, there’s no guaranteed rate, and values can decline. Because there’s no fixed rate to compare, variable annuities are generally left out of rate-based comparisons. Most buyers' shopping annuity rates are focused on fixed and immediate products, where the guarantee is the primary feature.

Best Fixed Annuity Rates in 2026

Current fixed annuity rates are near the highest levels seen in over 15 years, a direct result of the Federal Reserve’s rate-hiking cycle that began in 2022. Rate cuts have started, but the adjustment has been gradual, and MYGA yields continue to offer a substantial premium over traditional bank savings products.

Rates have moved upward recently, with increases of 0.30% to 1.85% across most term lengths in recent weeks. For buyers who’ve been on the sidelines, the current environment is a meaningful window before rates ease as monetary policy normalizes.

Fixed Annuity vs. CD: How Do They Compare?

This is the question we hear most often. The short answer: fixed annuity rates are currently higher than most CD rates for equivalent terms, and the tax treatment tips the advantage even further.

On a five-year commitment, the top MYGA rate from an A-rated carrier sits around 5.65%,⁷ while the best five-year CD sits at roughly 4.20% to 4.50%.⁸ That gap has narrowed as CD rates rose, but MYGAs maintain a clear lead.

Worth noting: On a $200,000 five-year MYGA at 6.30%, the tax deferral alone can be worth thousands of dollars in extra growth over the term for a retiree in a 22% federal bracket, compared to holding the same amount in a taxable CD.

Beyond the rate difference, here’s how the two products stack up on the things that actually matter:

Rate advantage: 

• Rate: Top 5-year MYGA yields ~5.65% (A-rated) or ~6.30% (best overall) vs. ~4.20%–4.50% for the best 5-year CD.
• Tax treatment: Fixed annuity interest grows tax-deferred, you owe nothing until withdrawal. CD interest is taxed as ordinary income every year, even if you reinvest it.
• Principal protection: Both protect your principal. MYGAs are backed by the insurer’s claims-paying ability; CDs are FDIC-insured up to $250,000 per depositor.
• Early access: Both carry penalties, surrender charges for MYGAs, early withdrawal penalties for CDs.
• At maturity: MYGAs can roll over or convert to lifetime income; CDs renew or pay out.
• Safety net: State guaranty associations protect annuity holders up to state-specific limits (typically $100,000–$250,000 per insurer). FDIC covers CDs up to $250,000 per depositor federally.

For higher-bracket savers holding money outside a retirement account, the tax deferral on a MYGA can meaningfully improve the effective after-tax return compared to a CD. Within state guaranty limits and from a strong carrier, the safety profile of both products is comparable.

Fixed Annuity vs. Bonds: How They Compare

Bonds and fixed annuities both offer predictable returns without equity risk, but they work differently.

On a five-year term, the top MYGA from an A-rated carrier yields around 5.65% versus approximately 4.25% for a comparable 5-year Treasury. The MYGA also grows tax-deferred, Treasury interest is federally taxable each year. On a $200,000 position in a 22% bracket, that combination can produce $15,000+ more in after-tax growth over the term.

The main trade-off is liquidity. Treasuries and corporate bonds (which may offer higher yields but carry more credit risk) can be sold on the secondary market at any time; MYGA surrender charges limit early access. For retirement savers who don't need mid-term access, a MYGA from a financially strong insurer compares favorably to Treasuries of similar duration on both yield and tax efficiency.

One advantage bonds hold: a Treasury is backed by the U.S. government. A MYGA is backed by the insurer's claims-paying ability and your state guaranty association. That's why carrier ratings matter, an A.M. Best rating of A− or higher keeps the practical risk extremely low.

Read: Fixed Indexed Annuity Rates

Pros and Cons of a Fixed Annuity

Fixed annuities do one thing exceptionally well: they eliminate uncertainty. But that certainty comes with real trade-offs. Here’s an honest look at both sides.

Pros of Fixed Annuity

• Guaranteed rate for the full term, ranging from one year for traditional fixed annuities to multiple years for MYGAs, no exposure to market volatility or interest rate drops
• Tax-deferred growth, no annual tax on credited interest until you withdraw, giving a meaningful edge over taxable CDs
• Predictable planning, the guaranteed rate allows you to project your account value at maturity, making retirement income planning more straightforward
• No fees on MYGAs, unlike variable or indexed annuities, a MYGA has no annual management fee or rider cost
• Flexible at maturity, roll into a new contract, convert to lifetime income, or take the cash

Cons of Fixed Annuity

• Limited liquidity, most contracts allow only 10% annual penalty-free withdrawals during the surrender charge period; accessing more triggers surrender charges
• No inflation protection, a fixed rate that looks strong today may underperform inflation over a 7–10 year term
• Opportunity cost, if market rates rise significantly after you lock in, you’re stuck at the original rate until maturity
• Not FDIC-insured, protection comes from the insurer’s financial strength and state guaranty associations, not a federal guarantee
• Early withdrawal penalties, surrender charges typically start at 5–10% and decrease over the term; withdrawals before age 59½ also trigger a 10% IRS penalty on earnings
• Taxed as ordinary income on withdrawal, gains don’t qualify for the lower capital gains rates that apply to long-term equity investments

What Determines Annuity Rates?

Annuity rates aren't arbitrary. The key drivers differ depending on whether you're looking at credited rates (fixed annuities and MYGAs) or payout rates (income annuities).

What Determines Credited Rates (Fixed Annuities, MYGAs, FIAs & RILAs)

The Bond Market Connection

Fixed annuity credited rates are most directly tied to long-term bond yields, particularly the 10-year U.S. Treasury and investment-grade corporate bond performance. When those bonds yield more, the insurer can pass higher credited rates to policyholders. This is why rates rose sharply between 2022 and 2024 as the Fed hiked aggressively. The 10-year Treasury is projected to hold in the mid-4% range through 2028, keeping rates historically competitive.⁵

Premium Size

Premium size can matter: some carriers offer tiered pricing at breakpoints of $100,000 or $250,000, and your state of residence can also affect available rates.

Carrier Financial Strength and Strategy

A higher advertised rate isn't automatically an advantage, lower-rated carriers sometimes offer elevated rates to attract volume. The standard benchmark is an A.M. Best rating of A– or above. For a long-term contract, the carrier needs to be financially sound for the full duration, not just on the day you buy.

What Determines Payout Rates (Income Annuities)

Your Age, Gender, and Premium Size

For income annuities (SPIAs), age, gender, and prevailing interest rates directly shape payout rates. Older buyers receive higher monthly payments for life contingent payouts because the payment window is shorter, and actuarial tables reflect different life expectancy projections for men and women. Higher interest rate environments also produce higher payout rates, as insurers can generate more return on the premium invested.

How Fixed Annuities Are Taxed

The tax treatment of a fixed annuity depends on whether it's held inside or outside a retirement account.

Non-qualified (after-tax funded, outside an IRA or 401k)

Interest grows tax-deferred, nothing is owed until withdrawal. The IRS uses LIFO accounting, so earnings come out first and are taxed as ordinary income. Your original principal (already taxed) comes out last, tax-free. Withdrawals before age 59½ trigger a 10% IRS penalty on the earnings portion.

Qualified (inside a Traditional IRA or 401(k))

All withdrawals, principal and earnings, are taxed as ordinary income, following standard IRA rules. Required Minimum Distributions apply starting at age 73.

Roth annuity (inside a Roth IRA)

Contributions are after-tax. Qualified distributions after age 59½ (with the account open at least five years) are completely tax-free, including all credited interest.

For money held outside a retirement account, tax deferral gives MYGAs a meaningful after-tax advantage over CDs, where interest is taxed annually even if reinvested. Consult a tax advisor to understand how annuity withdrawals interact with your income picture, particularly if Social Security or Medicare premiums are involved.

Read: Annuity vs Pension: Key Differences and How Each Works

How to Find and Compare the Best Annuity Rates

Shopping annuity rates isn’t like checking CD rates on a bank’s website. Rates are set carrier by carrier, vary by state, and change frequently, sometimes daily. Here’s a practical approach.

Use an Independent Agent/Broker or Marketplace

Going directly to one insurer shows you that insurer’s rates and nothing else. Independent agents and online annuity marketplaces compare rates across 30 to 90+ carriers simultaneously, surfacing options a single-company agent would never show you.

Independent brokers are compensated by the issuing insurer at no extra cost to you, the rate you receive is identical whether you go through a captive agent or an independent marketplace. The only difference is how many options you see before deciding.

Don’t Chase the Rate, Weigh Carrier Quality Too

It’s tempting to focus on the biggest number, but a 7.65% rate from a lower-rated carrier and a 5.65% rate from an A-rated insurer aren’t equivalent products. The rate means nothing if the carrier can’t meet its obligations a decade from now.

Filtering to carriers rated A− or better by A.M. Best is a reasonable starting point. It balances competitive yield with long-term security without being overly restrictive.

Match the Term to Your Timeline

Surrender charges are a real cost. If you lock into a 10-year MYGA and need funds in year four, those charges can significantly reduce, or eliminate, the rate advantage you were counting on.

Before choosing a term, be honest about when you’ll actually need the money:

• Retirement three years away? A 3-year MYGA aligns your timeline with your liquidity needs.
• Stable income and no near-term needs? A 5- or 7-year term captures better rates without over-extending.
• Using only a portion of savings? A longer term becomes more viable when you have other accessible funds.

Consider a Laddering Strategy

Rather than committing everything to one term, some buyers split their premium across multiple lengths, for example, $100,000 each into a 3-year, 5-year, and 7-year MYGA. Each contract matures at a different point, giving you rolling liquidity and the flexibility to reinvest at future rates. It’s a practical way to capture today’s strong rates while keeping your options open.

Understanding Surrender Charges

A surrender charge is a penalty on deferred annuities for withdrawing more than the free partial withdrawal amount before your contract term ends. It exists because the insurer invested your premium in long-term bonds to fund your guaranteed rate, and to recoup expenses incurred by the insurance company when issuing the policy.

Charges typically start at 5–10% in year one and step down to zero by the final year. Most MYGAs also include a 10% annual free partial withdrawal provision; you can take up to 10% of the account value each year without penalty.

Three situations where surrender charges are commonly waived:

• Confinement waiver - full access if confined to a nursing home or long-term care facility for 90+ days (feature varies by carrier)
• Terminal illness waiver - full access if diagnosed with a terminal illness (typically 12–24 months, feature varies by carrier)
• Death benefit - full account value passes to beneficiaries without surrender charges

Always review the surrender charge schedule and free partial withdrawal provision, and any provisions that would waive surrender charges before signing.

How Fixed Annuities are Protected: State Guaranty Associations

Fixed annuities aren't FDIC-insured, but they're not unprotected either. Every state has a guaranty association that covers policyholders if an insurer becomes insolvent. Most states follow the NOLHGA model act, which sets coverage at $250,000 in annuity contract values per insurer.⁶ Some states set limits at $100,000 or $300,000, verify yours at NOLHGA.com.

Coverage applies per insurer, per policyholder. Splitting a large deposit across two carriers effectively doubles your coverage.

For most buyers, the guaranty limit is a background consideration. A $200,000 MYGA from an A-rated carrier sits well within the typical $250,000 limit. Where it matters more: deposits over $250,000 with a single carrier, or contracts with lower-rated insurers where the headline rate is higher. In those cases, splitting across insurers or staying within guaranty limits is worth the extra step.

*Important: the guaranty association is a safety net, not a substitute for carrier due diligence. The goal is to choose a financially strong insurer so it never needs to be invoked.*

Are Annuity Rates Good Right Now?

Yes, and that’s not a hedge. Fixed annuity rates are near 15-year highs. For buyers who spent the 2010s watching MYGA rates sit between 2% and 3%, the current environment of 5% to 6% guaranteed returns is a material shift.

The more useful question is how long this window stays open. The expectation across most market forecasts is that rates will ease gradually, not suddenly, as monetary policy normalizes. The 10-year Treasury is projected to settle in the mid-4% range through 2028, which means fixed annuity rates should remain historically competitive even after pulling back somewhat from current levels.

Bottom line: For buyers near or in retirement who want to secure guaranteed growth or protect part of their portfolio from market risk, this is one of the strongest rate environments in over a decade. Waiting for rates to go higher is a speculation. Locking in a guaranteed 5% to 6% return from a financially strong insurer is a concrete outcome.