The Best Deferred Fixed Annuity Rates For June 2024

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

The Highest Fixed Annuity Rates For June 2024

As of June 15, 2024, Wichita Life offers the best fixed annuity rates, 6.50% for a 5-year term, one of the best currently available deals with a “B++” rated insurance company. Fixed annuities provide customers with a guaranteed interest rate over a set period, similar to how certificates of deposit interest rates operate.

TermProviderAM Best RatingRate
2-YearAspidaA-5.45%
3-YearSentinal SecurityB++5.90%
4-YearAmericoA5.55%
5-YearWichita NationalB++6.50%
6-YearNassauB++5.75%
7-YearHeartland NationalB++5.80%
8-YearEquitrustB++5.50%
9-YearAmerican NationalA5.50%
10-YearHeartland NationalB++5.80%
20-YearAtlantic Coast LifeB++4.90%

Best 2-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
AspidaA-2 YearsNo5.45%
AmericoA2 YearsYes5.35%

Best 3-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
Sentinal SecurityB++3 YearsNo5.90%
Atlantic Coast LifeB++3 YearsNo5.90%

Best 4-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
AmericoA4 YearsYes5.55%
NassauB++4 YearsYes5.50%

Best 5-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
Wichita NationalB++5 YearsNo6.50%
Heartland NationalB++5 YearsYes5.80%

Best 6-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
NassauB++6 YearsYes5.75%
OxfordA6 YearsYes5.70%

Best 7-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
HeartlandB++7 YearsYes5.80%
NassauB++7 YearsNo5.80%

Best 8-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
EquiTrustB++8 YearsYes5.50%
American NationalA8 YearsYes5.50%

Best 9-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
American NationalA9 YearsYes5.50%
Pacific GuardianA9 YearsYes5.50%

Best 10-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
Heartland NationalB++10 YearsYes5.80%
EquiTrustB++10 YearsYes5.60%

Best 20-Year Fixed Annuity Rates

Insurance CompanyA.M. Best RatingTermLiquidityRate
Atlantic Coast LifeB++20 YearsNo4.90%
Atlantic Coast LifeB++20 YearsNo4.89%

Current Fixed Annuity Rates

At The Annuity Expert, we are licensed financial professionals who can help you secure a fixed annuity. We understand that retirement planning can be complex, and we are here to help you every step of the way. We offer free quotes and custom solutions tailored to your unique needs. Contact us today to learn more about how we can help you reach your retirement goals.

Understanding Fixed Annuities

A fixed annuity is an insurance contract that offers a guaranteed interest rate on contributions similar to a certificate of deposit. Fixed annuities can also provide a steady income stream, which is particularly useful for retirees.

How Does a Fixed Annuity Work?

When you purchase a fixed annuity, you pay a lump sum or series of payments to the insurance company. In return, the insurer credits your account with a guaranteed interest rate, which compounds over time. Upon reaching the annuity phase, you can withdraw the accumulated funds either as a lump sum or receive regular payments over a specified period or for life.

Types of Fixed Annuities

Fixed Annuity Rates

Pros and Cons of Fixed Annuities

Pros

  • Guaranteed Returns: Provide stable and predictable returns.
  • Tax-Deferred Growth: Interest earnings grow tax-deferred, compounding over time without immediate tax liabilities.
  • Principal Protection: Your initial investment is protected, ensuring no loss of principal even if the market performs poorly.
  • No Market Risk: Not influenced by market fluctuations, offering a secure investment option.

Cons

  • Liquidity Issues: Early withdrawals may incur substantial surrender charges.
  • Inflation Risk: Fixed returns might not keep up with inflation, reducing purchasing power over time.
  • Limited Growth Potential: Generally offer lower returns compared to more aggressive investments like stocks.

Fixed Annuity Risks

While fixed annuities offer guaranteed returns and principal protection, they are not without risks:

  • Inflation Risk: Fixed payments may not keep up with inflation.
  • Surrender Charges: Early withdrawals can result in penalties.
  • Interest Rate Risk: Locked-in rates might be lower than future prevailing rates.
  • Company Solvency: The insurer’s financial stability is crucial as the guarantees are only as strong as the issuing company.
Best Fixed Annuity Rates

Fixed Annuity Examples

Example 1: Retirement Income

John, 65, purchases a fixed-income annuity with a lump sum of $100,000. The insurer guarantees a 5% annual return, providing him with a steady income of $5,000 annually for life.

Example 2: Deferred Growth

Sarah, 50, invests $50,000 in a fixed deferred annuity with a 4% annual interest rate. By the time she retires at 65, her investment will have grown tax-deferred, significantly increasing her retirement savings.

Fixed Annuity Rates Today

Next Steps

Fixed annuities are a strong option for those seeking stability and guaranteed returns. Consider your long-term financial needs and the specific features of each annuity type to find the best fit for your retirement strategy.

Contact us for personalized advice or a quote on fixed annuities. Our experts are here to help you make the best financial decisions for your future.

Fixed Annuity Quotes

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Questions From Our Readers

What are current fixed annuity rates?

The best MYGA and fixed annuity rates are 5.80% for a 7-year surrender period, 5.80% for a 10-year surrender period, 6.30% for a 5-year surrender period, and 5.90% for a 3-year surrender charge period.

What is the highest fixed annuity rate?

Wichita National Life Insurance Company offers a competitive interest rate of 6.30% for five years as of May 1, 2024.

Do fixed annuities have fees?

Fixed annuities do not charge annual fees in the traditional sense but reduce the guaranteed interest rate for a feature or benefit. Surrender charges may be imposed if annuity owners prematurely cancel their retirement plans. Additional tax penalties will incur if owners withdraw money early (before age 59.5).

Are annuities FDIC insured?

Annuities are not FDIC insured or any other federal agency. Instead, they are guaranteed by the issuing insurance company. The state’s insurance commissioners regulate fixed annuities. The State Guaranty Association (SGA) insures insurance companies. The insurance companies are also regulated by the National Association of Insurance Commissioners (NAIC). FINRA, a financial industry regulatory authority, regulates variable annuities.

Are there any 1-year fixed annuity rates?

Clear Spring offers 1-year fixed annuity rates. However, several 2-year fixed annuity rates are also available.

How much does a $100,000 fixed annuity pay per month?

With Corebridge Financial’s Fixed Annuity, you can enjoy a lifetime guaranteed income from $500 to as much as $1,485 monthly.

Why are fixed annuity rates higher than CDs?

Fixed annuity interest rates are often higher than CDs due to longer investment periods and the insurance company’s ability to invest in a broader range of opportunities.

What are the best 30-year annuity rates?

Currently, there are no 30-year fixed annuities available. The longest guaranteed fixed annuity period is 20 years.

If the Federal Reserve increases interest rates, will fixed annuity rates increase, and if the Fed decreases rates, will annuity rates decrease?

Usually, that’s the case. Fixed annuity rates tend to align with broader interest rate trends, including those influenced by the Federal Reserve. So, when the Fed ups its rates, you often see a bump in annuity rates. This happens because insurance companies put much of their annuity money into fixed-income investments like bonds, yielding more when rates increase. On the flip side, if the Fed lowers rates, the yields on these investments typically dip, which can lead to lower rates on fixed annuities.

Can an interest rate change on a fixed annuity?

For a fixed annuity, the interest rate is generally guaranteed not to change during the surrender period, which is the initial term of the annuity contract. However, the interest rate can change once this initial term or surrender period ends and the policy renews.

Do fixed annuities vary by state?

Yes, fixed annuities can vary by state. Insurance companies often tailor their annuity products to comply with each state’s specific regulations and laws. These variations might include differences in available features, benefit options, interest rates, and even the types of annuities offered.

What is the longest-term and highest rate for a fixed annuity right now?

As of June 2024, the longest term would be 20 years. The best rate is 6.3% on a 5-year fixed annuity.

What is a deferred fixed annuity?

A deferred fixed annuity, also known as a Multi-Year Guaranteed Annuity (MYGA), is a type of annuity contract that guarantees a fixed interest rate for a set period. It’s an investment vehicle primarily used for retirement planning.

How much do I need to invest in a fixed annuity?

At least $5,000.

Are fixed annuities taxed?

Yes, fixed annuities are taxed. Earnings grow tax-deferred, but withdrawals and payments are subject to income tax. If taken before age 59½, they may also incur a 10% early withdrawal penalty.

Can you cash out a fixed annuity?

Yes, you can cash out a fixed annuity, but it may involve surrender charges, taxes, and potential early withdrawal penalties if done before age 59½.

Who bears all of the investment risk in a fixed annuity?

The insurance company bears all of the investment risk in a fixed annuity, ensuring the annuitant receives guaranteed payments.

Do I have to take a series of payments in a fixed annuity?

You can choose a lump sum or series of payments in a fixed annuity, depending on your contract’s terms and personal financial needs.

Does fixed annuities allow withdrawals without a penalty?

Most fixed annuities often allow limited penalty-free withdrawals, typically up to 10% annually. Exceeding this limit or withdrawing early can result in surrender charges and tax penalties.

What is the fixed annuity definition?

A fixed annuity is a financial product that provides guaranteed, regular payments for a specified period or for life, with a fixed interest rate on the invested principal, ensuring stable income.

Can a fixed annuity lose value?

No, a fixed annuity cannot lose value. It guarantees a fixed interest rate and provides stable, predictable payments, protecting the principal investment from market fluctuations.

Can fixed annuities fail?

Fixed annuities are generally secure, but they can fail if the issuing insurance company becomes insolvent. State guaranty associations may offer some protection, but it’s important to choose a financially stable insurer.

Can withdrawals from a fixed-rate deferred annuity be reinvested in an IRA or transferred to a different IRA without being taxed?

Yes, withdrawals from a fixed-rate deferred annuity can be reinvested in an IRA or transferred to a different IRA without being taxed if done through a direct rollover or trustee-to-trustee transfer, maintaining tax-deferred status.

Can fixed annuities be inherited?

Yes, fixed annuities can be inherited. The beneficiary receives payments or a lump sum based on the contract’s terms, often bypassing probate.

Are fixed annuities guaranteed for life?

Some fixed annuities offer lifetime income options, guaranteeing payments for the annuitant’s life. Others provide payments for a specific term or until the contract value is depleted.

Do fixed annuities compound interest?

Yes, fixed annuities can compound interest, often triple compounding: interest on the principal, interest on the interest earned, and interest on contributions made.

What is an immediate fixed annuity?

An immediate fixed annuity or SPIA provides guaranteed, regular payments shortly after a lump-sum investment. It offers a stable income stream, typically for the annuitant’s lifetime or for a specified period.

Where are premiums from fixed annuities invested?

Premiums from fixed annuities are invested in the insurance company’s general account. These funds are typically allocated to conservative investments like bonds and other fixed-income securities to ensure stable returns and meet guaranteed payout obligations.

Are fixed annuities good for seniors?

Yes, fixed annuities are good for seniors due to their fixed interest rate, principal protection, long-term care financial assistance, guaranteed income, ability to pass down to beneficiaries, and probate avoidance.

Can I get a 7% annuity?

As of June 2024 there are no 7% annuities available.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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