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Company Name Rate Term Earnings
Oxford Life 3.10% 10 $ 3,628.80 Apply
Oxford Life 3.05% 9 $ 3,154.14 Apply
Oxford Life 3.20% 8 $ 2,913.13 Apply
Oxford Life 2.90% 7 $ 2,247.72 Apply
Oxford Life 3.05% 6 $ 2,005.36 Apply
Oxford Life 2.70% 5 $ 1,443.63 Apply
Oxford Life 2.65% 4 $ 1,116.92 Apply
Oxford Life 2.35% 3 $ 729.71 Apply
New York Life 1.35% 7 $ 990.51 Apply
New York Life 1.35% 6 $ 843.22 Apply
New York Life 1.35% 5 $ 697.90 Apply
New York Life 1.35% 4 $ 554.53 Apply
New York Life 1.35% 3 $ 413.08 Apply
American General 2.20% 10 $ 2,458.26 Apply
American General 2.20% 7 $ 1,663.26 Apply
American General 2.20% 6 $ 1,409.70 Apply
American General 2.20% 5 $ 1,161.66 Apply
Jackson National Life 2.15% 7 $ 1,622.59 Apply
Jackson National Life 2.10% 5 $ 1,106.09 Apply
Jackson National Life 1.85% 3 $ 570.24 Apply
Principal Financial Group 1.80% 7 $ 1,341.75 Apply
Principal Financial Group 1.80% 6 $ 1,139.58 Apply
Principal Financial Group 1.80% 5 $ 941.01 Apply
Principal Financial Group 1.80% 4 $ 745.97 Apply
Principal Financial Group 1.75% 3 $ 538.62 Apply
North American 2.00% 10 $ 2,211.99 Apply
North American 1.80% 7 $ 1,341.75 Apply
North American 2.00% 5 $ 1,050.79 Apply
North American 1.60% 3 $ 491.37 Apply
Standard Insurance Company 2.45% 10 $ 2,773.02 Apply
Standard Insurance Company 2.45% 7 $ 1,868.77 Apply
Standard Insurance Company 2.40% 5 $ 1,273.62 Apply
Standard Insurance Company 2.10% 3 $ 649.68 Apply
Pacific Life 2.15% 10 $ 2,396.23 Apply
Pacific Life 2.05% 9 $ 2,024.28 Apply
Pacific Life 1.85% 8 $ 1,593.81 Apply
Pacific Life 1.60% 7 $ 1,184.29 Apply
Pacific Life 1.55% 6 $ 973.96 Apply
Pacific Life 1.30% 5 $ 671.21 Apply
Reliance Standard 2.45% 5 $ 1,301.78 Apply
Delaware Life 2.85% 10 $ 3,293.13 Apply
Delaware Life 2.70% 7 $ 2,077.85 Apply
Delaware Life 2.30% 5 $ 1,217.50 Apply
Delaware Life 2.00% 3 $ 617.84 Apply

What Is a Fixed Annuity?

A fixed annuity, also known as a multi-year guaranteed annuity (MYGA), provides a guaranteed rate of return for a predetermined period of time. It is most similar to a Certificate of Deposit (CD) that is offered by a bank or other-FDIC insured institution, except that it is offered by an insurance company. In addition to providing a guaranteed rate of return for the investment term, fixed annuities, and all annuities, give you the opportunity to turn those savings into lifelong pension-like income. The fixed annuity guarantee is backed by the financial strength of the insurance company, which is best understood through its financial rating.

FYI, fixed annuities are known by a variety of names including:
  • CD annuity
  • CD-like annuity
  • Fixed rate annuity
  • Fixed annuity
  • Fixed deferred annuity
  • Deferred annuity
  • Multi-year guaranteed annuity (MYGA)
  • Single premium deferred annuity (SPDA)

Finding the Right Fixed Annuity

The three most important considerations in selecting a fixed annuity, (also known as a multi-year guaranteed annuity or MYGA) are the guaranteed annual rate, insurer rating, and the investment term.

  • Guaranteed Rate: This is the effective annual rate that your money is guaranteed to grow during the investment term assuming you hold the contract to maturity.
  • Insurer Rating: All reputable fixed rate annuity providers are rated by A.M. Best. Some might also be rated by Standard & Poor's, Moody's, and Fitch. The highest A.M. Best rating is A++, then A+, A, A-, B++, B+, etc. With annuity purchases, we recommend sticking to insurers with an A- or better rating.
  • Investment Term: Terms range from 3 years to 10 years. During that period of time, you’ll receive a guaranteed rate but will have limited access to your funds. Typically, but not always, rates increase as the term increases.

What's the Difference Between a Fixed Annuity and a CD?

Fixed annuities (a.k.a. multi-year guaranteed annuities or MYGAs) operate very similarly to CDs. Both vehicles offer a safe way to save money, crediting higher interest rates than available through savings accounts by requiring you to lock your money away for a period of time. However, fixed annuities have longer-term investment horizons and tax-preferential treatment, making them a better choice for retirement savings. As CDs are the more well known of the two products, it can be easier to understand fixed annuities using a side-by-side comparison:

 
Insurance Companies Banks
$25,000 - $3,000,000 Virtually any denomination
3 years - 10 years 3 months - 10 years
Fixed Annuities Vary by investment term & size, but typically higher than CD rates Vary by investment term & size, but typically lower than fixed annuity rates
Taxes on interest gains are deferred until money is withdrawn Interest gains are taxable annually as they are earned
Typically a portion of the account balance will be available for withdrawal annually, but a 10% IRS penalty is imposed for withdrawals before age 59½ Generally no free access to account balance is available
Backed primarily by the issuing insurance company and additionally by State Guaranty Funds Insured by the FDIC (up to $250,000 total per bank)
Asset passed directly to beneficiary without going through the probate process Probate process required to pass asset to heirs

Fixed Annuities
Insurance Companies

CD
Banks


Fixed Annuities
$25,000 - $3,000,000

CD
Virtually any denomination


Fixed Annuities
3 years - 10 years

CD
3 months - 10 years


Fixed Annuities
Fixed Annuities Vary by investment term & size, but typically higher than CD rates

CD
Vary by investment term & size, but typically lower than fixed annuity rates


Fixed Annuities
Taxes on interest gains are deferred until money is withdrawn

CD
Interest gains are taxable annually as they are earned


Fixed Annuities
Typically a portion of the account balance will be available for withdrawal annually, but a 10% IRS penalty is imposed for withdrawals before age 59½

CD
Generally no free access to account balance is available


Fixed Annuities
Backed primarily by the issuing insurance company and additionally by State Guaranty Funds

CD
Insured by the FDIC (up to $250,000 total per bank)


Fixed Annuities
Asset passed directly to beneficiary without going through the probate process

CD
Probate process required to pass asset to heirs

1035 Exchanges for Fixed Annuities

Your existing fixed, variable, and indexed annuities can be easily exchanged into a new annuity contract through a process known as 1035 exchange. This is a particularly popular approach to maximizing the value you get from your annuities since simply withdrawing the funds prior to age 59½ incurs an IRS penalty. Exchanging one annuity for another maintains your money's tax-advantaged status. Here are some key 1035 annuity exchange considerations:

  • Make sure you're getting more value out of the exchange: For example, if you're exchanging an existing fixed annuity for a new fixed annuity, the new fixed annuity should be paying a higher interest rate.
  • Be careful of surrender charges. Most fixed, variable, and indexed annuities have a surrender charge period. This is a certain number of years at the beginning of the annuity where you'll get charged (typically 1-10%) if you surrender (withdraw your money).
  • Evaluate your existing annuity's income options. All annuities offer the ability to annuitize, or turn your money into guaranteed income. Consult your insurance company to find out what annuitization rates they offer for your existing annuity, and compare those to current annuitization rates.