Written By : Elaine Silvestrini
Edited By : Emily Miller
Financially Reviewed By : Thomas J. Brock, CFA, CPA
This page features 15 Cited Research Articles

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The guaranteed interest rates for traditional deferred fixed annuities and MYGAs make these two types of annuities easy to understand when it comes to interest rates and the return these products can provide over the course of the contract term.

Variable, income, and fixed index annuities are more complicated. Because their returns are not calculated according to a guaranteed stated interest rate for a set period, consumers will not find rates for these products when searching for the best annuity rates.

Additionally, it’s important to note that fixed annuity and MYGA rates change daily. To keep you informed on the current fixed annuity rates, Annuity.org and its partner Senior Market Sales update the following tables every week.

Best Fixed Annuity Rates for July 2021

Multi-year guaranteed annuities, or MYGAs, are a type of fixed annuity that guarantees a fixed interest rate for a specified time period — usually three to 10 years. Like traditional fixed annuities, MYGAs are subject to fees called surrender charges, which an annuity holder must pay if he or she withdraws money from an annuity before the specified time period is over.

The best MYGA rate is 2.7 percent for a 10-year surrender period, 2.9 percent for a seven-year surrender period, 2.8 percent for a five-year surrender period and 2.15 percent for a three-year surrender period.

Because MYGA rates change daily, Annuity.org and its partner Senior Market Sales update the following tables every week. Therefore, it’s important to check back for the most recent information.

3-Year Annuity Rates

Product Name Rate AM Best Rating
GuaranteeShield 1.75% A- Apply
Palladium MYG 250k+ 2.10% A Apply
MaxRate version 1 100k+ 1.30% A Apply
Guarantee Platinum 1.95% A- Apply
SecureFore 3 100k+ 1.65% A Apply
Bankers Elite (non liquid) 2.15% B++ Apply
Bankers Series (liquid) 2.00% B++ Apply
Guarantee Choice 100k+ 1.75% A+ Apply
Multi-Select 1.60% A- Apply
Milestone 2.05% A- Apply
View all 10

4-Year Annuity Rates

Product Name Rate AM Best Rating
American Pathway MYG 100k+ 2.10% A Apply
Multi-Select 2.25% A- Apply
Milestone 2.10% A- Apply

5-Year Annuity Rates

Product Name Rate AM Best Rating
GuaranteeShield 2.25% A- Apply
American Pathway MYG 100k + 2.10% A Apply
Palladium MYG 250k+ 2.25% A Apply
Platinum Assure 5 2.80% A Apply
MaxRate version 1 100k+ 1.90% A Apply
Guarantee Platinum 2.65% A- Apply
SecureFore 5 100k+ 2.20% A Apply
Bankers Elite (non liquid) 2.80% B++ Apply
Bankers Series Premier (liquid) 2.60% B++ Apply
MYGuarantee Plus 1.65% A+ Apply
Ultra-Premier (No Roth IRAs) 2.00% A+ Apply
Guarantee Choice 100k+ 1.90% A+ Apply
Multi-Select 2.45% A- Apply
Reliance Guarantee 5 2.25% A++ Apply
Milestone 2.75% A- Apply
View all 15

6-Year Annuity Rates

Product Name Rate AM Best Rating
Guarantee Annuity 1.85% A- Apply
American Pathway MYG 100k + 2.10% A Apply
Palladium MYG 250k+ 2.45% A Apply
Multi-Select 2.75% A- Apply
Milestone 2.50% A- Apply

7-Year Annuity Rates

Product Name Rate AM Best Rating
Guarantee Annuity 1.90% A- Apply
American Pathway MYG 100k + 2.10% A Apply
Palladium MYG 250k+ 2.45% A Apply
MaxRate version 1 100k+ 2.00% A Apply
Guarantee Platinum 2.80% A- Apply
Bankers Elite (non liquid) 2.90% B++ Apply
Bankers Series Premier (liquid) 2.75% B++ Apply
MYGuarantee Plus 1.80% A+ Apply
Ultra-Premier (No Roth IRAs) 2.35% A+ Apply
Guarantee Choice 100k+ 2.20% A+ Apply
Multi-Select 2.60% A- Apply
Reliance Guarantee 7 2.30% A++ Apply
Milestone 2.60% A- Apply
View all 13

8-Year Annuity Rates

Product Name Rate AM Best Rating
Palladium MYG 250k+ 2.45% A Apply
Multi-Select 2.80% A- Apply

9-Year Annuity Rates

Product Name Rate AM Best Rating
Palladium MYG 250k+ 2.55% A Apply
Bankers Elite (non liquid) 3.00% B++ Apply
Multi-Select 2.65% A- Apply

10-Year Annuity Rates

Product Name Rate AM Best Rating
American Pathway MYG 100k + 2.10% A Apply
Palladium MYG 250k+ 2.55% A Apply
MYGuarantee Plus 2.15% A+ Apply
Guarantee Choice 100k+ 1.95% A+ Apply
Multi-Select 2.70% A- Apply
Reliance Guarantee 10 2.30% A++ Apply
View all 6

How Do You Compare Rates for Different Types of Annuities?

Annuity rates are tricky to compare because traditional fixed annuities guarantee an interest rate for a one-year term, whereas other fixed annuities guarantee rates for anywhere from three to 10 years. These multi-year term contracts are called multi-year guaranteed annuities (MYGAs).

Conversely, variable annuities don’t guarantee interest rates because their earnings depend upon the performance of an underlying stock portfolio.

And yet another type of annuity, the fixed index annuity, employs unique crediting methods based on the performance of a stock market index.

This can be perplexing to the average consumer. It helps to understand that annuities fall into specific buckets.

These buckets correlate to:
The way the annuity earns interest
Fixed annuities, including multi-year guaranteed annuities, earn interest at a set rate for a guaranteed period. These are the most straightforward annuity types in terms of interest rates. The rates presented on this page are fixed annuity rates for the specified terms — for example, 5-year fixed annuity rates.
The point at which the premium is annuitized, meaning when the lump sum is converted to a payment stream
Immediate annuities, also known as income annuities or single premium immediate annuities, convert premiums to a stream of income instantly. This doesn’t mean that the annuitant must begin receiving income payments immediately. In fact, deferred income annuities (DIAs) are annuitized immediately, but payments begin at a specified future date.
The length of the accumulation period, meaning the number of years between the date of purchase and the date that income payments will begin
Not to be confused with the time frame for annuitization, the accumulation period is the third bucket annuity carriers use to classify these products. Immediate annuities have no accumulation period. The sole purpose of an immediate annuity is to generate a guaranteed income stream. Deferred annuities, on the other hand, have an accumulation period during which interest is credited according to the contract.

In addition, many annuities have pricing levers — interest rate floors, caps and participation rates — that affect their growth potential.

The interest rates for indexed and variable annuities fluctuate with the stock market. Therefore, people who purchase one of these annuity types must review either the variable annuity prospectus or the strategy options and rate sheet for the specific indexed product they are buying.

Income annuities (FIAs and DIAs) are typically quoted using either the monthly income payment amount or an annual payout rate that represents the percentage of the premium amount that the annuitant has received in income payments.

This leaves deferred fixed annuities and MYGAs, which — as we’ve established — are the least complex products. Their guaranteed interest rates make them easy to understand when it comes to interest rates and the return they can provide over the course of the contract term.

Understanding Annuity Rates

Fixed annuity rate quotes are useful when choosing among annuities offered by different carriers.

"Consumers should determine how much they would like to invest in an annuity, then shop around to various highly rated insurance companies (look for at least an A- rating) to see what their rates are, and do comparison shopping, like you would when you buy a car. "
— Rubina Hossain, certified financial planner

Fixed annuity rates are set by the providers — typically insurance companies — that issue the contracts. AM Best, a nationally recognized statistical rating organization (NRSRO), rates insurance companies based on their ability to pay their financial obligations. The AM Best rating is not a recommendation of a particular annuity product but an assessment of the insurance company’s financial strength.

“Consumers should determine how much they would like to invest in an annuity, then shop around to various highly rated insurance companies (look for at least an A- rating) to see what their rates are, and do comparison shopping, like you would when you buy a car,” certified financial planner Rubina Hossain told Annuity.org.

Many carriers offer penalty-free withdrawal provisions that allow the annuity holder to make partial withdrawals before the surrender period ends without incurring fees. For example, some contracts allow annuity holders to withdraw up to 10 percent, starting in the first year.

Contracts with less generous withdrawal provisions may have higher rates. If you want the possibility of higher rates than fixed annuities offer and are willing to take on more risk, you could explore fixed indexed or variable annuities.

Estimate Your Monthly Lifetime Income From an Immediate Annuity:

*The dollar amount from this calculator is an estimate based on user-entered data. This estimate does not constitute a binding agreement between you and Annuity.org or its partners. We strongly urge you to consult with a financial advisor before purchasing an annuity.

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How Is My Monthly Income Estimated?

Although it’s not possible for an immediate annuity calculator to account for every provision in a contract, our calculator uses a principal amount, a fixed annual interest rate, and your gender and age to generate a rough estimate of what your monthly payments could be for the rest of your life.

We use the gender and age provided along with the Centers for Disease Control and Prevention life expectancy table to estimate the number of years you could receive payments starting one month from when you enter your data.

How Are Annuity Rates Set?

Insurance companies that sell annuities determine how they set growth rates for fixed annuities. The details are spelled out in annuity contracts.

The company will usually provide a guaranteed minimum rate for a set time period, usually three to 10 years, depending on the contract.

Jon Summers headshot
Jon Summers, senior marketing consultant with Senior Market Sales

Rate setting can vary slightly from carrier to carrier, according to Jon Summers, senior marketing consultant with Senior Market Sales. Summers told Annuity.org that, generally speaking, the carrier takes a consumer’s premium and lumps it in with all of the premiums received.

“They then turn around and buy a basket of bonds and use that guaranteed return to either offer a rate to the consumer or buy options to provide upside potential on an index like an FIA (fixed index annuity),” Summers said. “That is why you see some modifiers like caps, spreads, participation rates, etc. This comes from the pricing options the carrier is able to offer their policy holders.”

Comparing Annuities to Other Financial Options

Annuities are not investment products. They are insurance contracts with tax benefits.

Industry expert Sheryl J. Moore wrote in a January 2019 blog post that fixed annuity sales had declined over the past decade, along with rates. Gone, she said, were the double-digit rates that had been available at the turn of the century.

"Heck — even fixed annuities are considerably more competitive than other ‘safe money’ alternatives."
— Sheryl J. Moore, founder of Wink

For this reason, she said, some advisors had shied away from recommending annuities. But she noted that in spite of their decline, the rates for annuities continued to significantly outpace the interest rates provided by banks for other accounts, including saving accounts and certificates of deposit, or CDs.

And fixed annuities aren’t vulnerable to the risks of the stock market.

Consumers who purchase annuities, she wrote, “can sleep soundly at night, not having to worry about losing principal due to market volatility. These annuity purchasers are more concerned about the return of their money, than the return on their money.”

Consumers who want their money in a safe place, she added, “can see that the potential for gains with indexed annuities is uber-competitive with other fixed money instruments today. Heck — even fixed annuities are considerably more competitive than other ‘safe money’ alternatives.”

Moore’s advice to financial service providers regarding annuities: “We all should probably keep that arrow in our quivers.”

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Fixed Annuities vs CDs

In general, fixed annuity rates are about 35 percent higher than CD rates, Samuel Rad, a certified financial planner, told U.S. News and World Report.

Wade Pfau headshot
Wade Pfau, professor of retirement income at The American College of Financial Services

Professor of retirement income Wade Pfau told Annuity.org that MYGAs are “the annuity equivalent of CDs but provide tax deferral.” Unlike certificates of deposit, annuities grow tax deferred, meaning you don’t pay taxes until the money is withdrawn.

The other main difference between fixed annuities and CDs is that traditional fixed annuities and MYGAs are not insured by the Federal Deposit Insurance Corporation (FDIC). Instead, they’re backed by the life insurance companies that issue them and by state guaranty associations.

What Is an Annual Payout Rate?

An annual payout rate is the percentage of the premium an annuity holder will receive each year as income.

The insurance company can quote you a price in terms of a payout rate or a monthly income dollar amount, but they are ultimately the same thing.

For example, if an insurer offers you a 5 percent payout rate for a $100,000 annuity, you will receive $5,000 a year or $416 a month.

Annuity Rates

Note that neither of these is the same as the return on the annuity, which insurance companies rarely reference when quoting annuity prices because the return often depends on how long the annuitant lives — an unknown variable in all cases.

What you need to understand about the return on an annuity is simply this: The longer you live, the greater the return on your annuity because with every payment, the difference between what you have received in income and what you paid in principal decreases, which means the return — expressed as a
percentage — increases.

Using our example above, the return on a $100,000 annuity with a 5 percent payout rate will be approximately 2 percent after 25 years’ worth of payments. After 30 years, the return will be approximately 3 percent, and this will increase with every payment.

Frequently Asked Questions About Annuity Rates

What is the average interest rate on an annuity?
Interest rates depend on the type of annuity you buy. Fixed annuities offer guaranteed returns, while the interest rates of variable annuities depend on the performance of a connected investment portfolio. Annuities with higher interest rates also carry a greater risk of losing money.
What is the rate of return on an annuity?
The rate varies. Annuities are structured for providers to pay income for the remainder of the annuitant’s life. The rate of the return depends on how much money was spent on the annuity and the annuitant’s lifespan after making the purchase.
Who has the best immediate annuity rates?
Immediate annuity payout rates vary based on your upfront payment amount to the insurance company. Specific contract terms, your gender, age and other factors can also impact this rate. You can use an annuity calculator to estimate monthly payments or speak to a qualified financial professional to help you compare quotes.
What are annuity rates based on?
Fixed annuities have guaranteed interest rates for a predictable income stream. These rates are pre-determined by the annuity company and detailed in your contract. Variable annuities have interest rates based on the performance of an investment portfolio.
Please seek the advice of a qualified professional before making financial decisions.
Last Modified: July 12, 2021

15 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Barney, L. (2018, August 31). Refresher on Annuity Pricing Mechanics. Retrieved from https://www.planadviser.com/exclusives/refresher-annuity-pricing-mechanics/
  2. Brown, J. (2018, January 5). Fixed Annuities Are an Option Over CDs. Retrieved from https://money.usnews.com/banking/articles/fixed-annuities-are-an-option-over-cds
  3. Chancy, M. (2018, August 31). Certified financial planner. Interview with Annuity.org
  4. Cision PR Newswire. (2018, March 7). Renowned Economist Roger Ibbotson Unveils New Dowd, C. (2017, April 13). What Rising Interest Rates Mean for Annuities. Retrieved from https://www.winkintel.com/2017/04/rising-interest-rates-mean-annuities/
  5. Hussein, R. (2019, November 19). Email with Annuity.org.
  6. Mandell, L. (2013, September 12). An 8.3 Percent Return on Your Money, Guaranteed for Life? Retrieved from https://www.pbs.org/newshour/economy/an-83-percent-return-on-your-m
  7. Molis, J. (2019, April 5). How to calculate the Rate of Return on Annuities. Retrieved from https://budgeting.thenest.com/calculate-rate-return-annuities-28802.html
  8. Moore, S.J. (2019, June 25). Annuity Rates: No Reason to Get Psyched Out: Reprint #AnnuityAwarenessMonth. Retrieved from https://www.winkintel.com/2019/06/annuity-rates-no-reason-to-get-psyched-out-reprint/
  9. Nuss, K. (2017, December 7). Annuities Beat CDs by Offering Higher Guaranteed Rates and Tax Savings. Retrieved from https://www.mdmag.com/physicians-money-digest/personal-finance/annuities-beat-cds-by-offering-higher-guaranteed-rates-and-tax-savings
  10. Pfau, W. (2019, November 19). Email with Annuity.org.
  11. Pfau, W. Safety-First Retirement Planning. Virginia: Retirement Researcher Media, 2019.
  12. Summers, J. (2019, November 19). Email with Annuity.org.
  13. Swanson, W. (2019, February 25). Why That MYGA Rate Is So Hot. Retrieved from https://www.thinkadvisor.com/2019/02/25/why-that-myga-rate-is-so-hot/
  14. Tomlinson, J. (2017, July 21). What Advisors Need to Know About Annuity Mortality Credits. Retrieved from https://www.advisorperspectives.com/articles/2017/07/31/what-advisors-need-to-know-about-annuity-mortality-credits
  15. Zebra Capital Management. (2018, March 7). Renowned Economist Roger Ibbotson Unveils New Research Indicating Fixed Indexed Annuities May Outperform Bonds Over the Next Decade. Retrieved from https://www.prnewswire.com/news-releases/renowned-economist-roger-ibbotson-unveils-new-research-indicating-fixed-indexed-annuities-may-outperform-bonds-over-the-next-decade-300609670.html