Current 4-Year Fixed Annuity Rates
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| Product | Rate | Guarantee Period | Surrender Period | AM Best Rating |
|---|---|---|---|---|
Access SPDA |
3.25% | 4 Years | 4 Years | A- |
American Pathway Fixed 4 Annuity |
3.10% | 4 Years | 4 Years | A |
|
American Pathway Fixed 4 Annuity |
3.70% | 4 Years | 4 Years | A |
|
American Pathway Vision MYG |
3.50% | 4 Years | 10 Years | A |
Asset Guard |
4.40% | 4 Years | 4 Years | A- |
Case Study: Buying a 4-Year Fixed Annuity
Jack
Age: 61
Amount Invested: $100,000
Jack is 61, nearing retirement and looking for ways to continue to boost his nest egg. Given his age, he has little interest in a path that might put his existing money at risk. He’s fine with a lower return in exchange for security.
Initially, Jack is focused on a 4-year certificate of deposit (CD) with a solid rate that will accomplish his goal. But he then learns about fixed annuities. Since Jack will be in a lower tax bracket in a few years when he retires, he is intrigued by the tax-deferred nature of the product.
The offered rate is similar to that of the CD, and liquidity is not a major concern for Jack. So, he opts for the annuity, taking advantage of a minimum interest rate of 5.5%.
Choose From 1- to 10-Year Fixed Annuities
4-Year Fixed Annuity vs. Other Term Products
Given their short-term nature, security and similar rates, fixed annuities are often compared to CDs. You wouldn’t have a hard time finding a 4-year annuity or a 4-year CD with generally favorable rates.
The two options have a lot of similarities, and there is no “right” choice.
4-Year Fixed Annuities vs. 4-Year CDs
A 4-year annuity and a 4-year CD both require you to lock money into an account in exchange for a modest but effective interest rate.
While CDs are acquired through banks and credit unions, fixed annuities are available from major annuity and insurance providers. Unlike many investment opportunities, there isn’t much of a risk built into either product.
If you are near retirement, then the taxation may be a major factor in your decision. For example, when you place your money in a CD, the interest you earn is taxed each year as ordinary income. If you are trying to stay in a lower bracket, this might be a problem.
Fixed annuities, on the other hand, are tax-deferred products. This means your interest is not taxed each year, allowing it to grow even more. It also means that you may take advantage of a lower tax bracket when taxes finally are owed during retirement.
However, one advantage that CDs hold over annuities is their liquidity. Fixed annuities are generally illiquid products. You may be able to withdraw up to 10% of the contract value, but typically your money is locked in.
Plus, the penalty for breaking a CD early isn’t as severe as an annuity. You may just have to forfeit some of the interest owed.
Choosing between an annuity or a CD will depend on your preferences.
Keep in mind, that the 4-year fixed annuity may or may not provide any free withdrawal options. There are some right now that do not allow you to take any earnings out and then there are others that will only let you take out 5% per year.John Stevenson, CFFOwner and Advisor at Stevenson Retirement SolutionsJohn Stevenson, a Certified Financial Fiduciary®️, specializes in securing retirements with tax-free accounts. With a focus on guaranteed retirement, he’s ensured none of his clients suffer from market fluctuations. As a renowned educator and podcast host, John empowers thousands weekly, sharing his expertise in minimizing taxes and protecting against financial downturns.
How We Get Our Rates Data
Annuity.org supplies fixed annuity rates through Cannex — an independent company that provides access to a database of updated annuity products.
We synchronize and update our rates information several times each week using the newest Cannex data to help ensure you have access to the most recent interest rates available.
Annuity.org features rates for fixed annuities from one- to 10-year terms. In addition, we list the carrier that offers the rate and its respective AM Best financial strength rating.
Guarantee financial freedom with an annuity.