Fixed annuities are a safe way to grow your savings if you want a steady and predictable option instead of putting your money in a bank or the stock market. They work in some ways like certificates of deposit (CDs), but they come with extra benefits that can help you save more money in the long run.
One big difference is that CDs usually last no more than five years, and any interest you earn is taxed every year. With annuities, you can choose longer time periods and all the money you earn stays tax-free until you take it out. This means your savings can grow faster because you don’t have to pay taxes on the earnings right away.
The following table shows 6-year fixed annuity rates from some of the nation’s top providers. The term of the annuity refers to how many years the initial rate is guaranteed.
Current 6-Year Fixed Annuity Rates
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| Product |
Rate
|
Guarantee Period
|
Surrender Period
|
AM Best Rating
|
|---|---|---|---|---|
Access SPDA |
3.45% | 6 Years | 6 Years | A- |
American Pathway Vision MYG |
4.55% | 6 Years | 10 Years | A |
Certainty Select |
5.30% | 6 Years | 6 Years | B++ |
Future Flex 5 |
4.60% | 6 Years | 5 Years | A- |
|
Guaranty Income Life Insurance Company Guaranty Rate Lock |
4.10% | 6 Years | 6 Years | A- |
Harbourview Multi-Year Guaranteed Annuity |
5.35% | 6 Years | 5 Years | A |
|
Harbourview Multi-Year Guaranteed Annuity |
5.20% | 6 Years | 6 Years | A |
|
Harbourview Multi-Year Guaranteed Annuity |
5.20% | 6 Years | 3 Years | A |
|
Harbourview Multi-Year Guaranteed Annuity |
5.20% | 6 Years | 7 Years | A |
|
Harbourview Multi-Year Guaranteed Annuity |
5.35% | 6 Years | 10 Years | A |
Case Study: Buying a 6-Year Annuity
Choosing the right term for your annuity often depends on your personal and financial circumstances. To illustrate how someone might decide to purchase a 6-year fixed annuity, let’s look at the following case study.
Edgar
Age: 60
Goals:
- Create an income stream in retirement
- Grow savings without the risk of losing value
Edgar is 60 years old and plans to retire at 66. He would like to continue receiving regular income even after he retires.
Because he is so close to retirement, Edgar doesn’t want to risk losing any value of his retirement savings by investing in stocks. Instead, he investigates safe investment options like CDs and fixed annuities.
After comparing the rates on these products, Edgar decides to purchase a 6-year fixed annuity. The annuity will grow at a guaranteed interest rate for the six-year term before converting to a stream of income payments that Edgar can collect throughout his retirement.
6-Year Fixed Annuity vs. Series I Savings Bonds
With a time horizon of six years, you might consider Series I Savings Bonds, as well as fixed annuities. The U.S. Treasury Department issues and backs I bonds, so these products are considered extremely safe.
I bonds earn interest based on two rates: a fixed interest rate (1.20% as of February 2025) and a rate that resets every six months based on inflation measures. I-Bonds are currently paying 3.11% (February 2025). The interest earned by I bonds should keep pace with inflation but may not offer the best rates when compared to other savings products in a stable or falling inflationary environment.
An I bond can be redeemed, or cashed out, after 12 months, but redeeming it before the five-year anniversary date will result in losing the last three months of interest earned. This means that I bonds have somewhat more liquidity than fixed annuities, which cannot be cashed out before their maturity date without incurring steep surrender charges.
However, this increased liquidity comes at the cost of less predictable rates. Unlike a 6-year fixed annuity, which guarantees a fixed rate for the entire term, the interest rate I bonds earn fluctuates and can go up or down during the life of the bond. Moreover, it’s worth mentioning that individuals cannot purchase I bonds within their IRA.
Another potential downside of I bonds is the limit of how many you can purchase. The Treasury Department only allows you to buy $10,000 worth of electronic I bonds in a year, with another $5,000 in paper I bonds that you can purchase with your tax refund. Annuities, on the other hand, have no legal purchase limit, and most companies place caps at around $1 million per annuity.
You could choose to ladder I bonds, splitting a larger purchase amount over multiple years so the I bonds mature over time. However, some investors might find this strategy overly complicated and may prefer a more hands-off approach.
I Bonds could serve as an alternative to a 6-year fixed annuity for individuals with smaller savings who seek to maintain liquidity while keeping pace with inflation. However, for those with larger savings aiming for higher rates and the potential for lifetime income, a 6-year fixed annuity might be the preferable choice. Lastly, it’s important to note that fixed annuities can be purchased using either qualified IRA or non-qualified funds.
You have the option to purchase a 6-year fixed rate annuity with either qualified or non-qualified savings. A 6-year fixed rate annuity can supplement other sources of sustainable predictable income in retirement.
Marguerita M. Cheng, CFP®, CRPC®, CSRIC®, RICP®CEO of Blue Ocean Global WealthMarguerita M. Cheng, CFP®, CRPC®, CSRIC®, RICP®, is the chief executive officer at Blue Ocean Global Wealth. As a CFP Board of Standards Ambassador, Marguerita educates the public, policymakers and media about the benefits of competent and ethical financial planning. She is a past spokesperson for the AARP Financial Freedom campaign.
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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.
