What Is A Fixed Interest Rate, And How Does It Work?

Shawn Plummer

CEO, The Annuity Expert

The interest rate is one of the most important things to consider when looking for a new savings account. But what does that mean? And how does it work? Here’s a quick guide to understanding fixed interest rates and how they can benefit your savings.

What Is A Fixed Interest Rate?

A fixed interest rate is an interest rate that does not change over time. This means that your interest rate will remain the same regardless of what happens in the market or with inflation. This can be helpful in planning and budgeting for your future because you’ll always know exactly how much interest you’ll be earning on your account.

How Does A Fixed Interest Rate Work With Savings Accounts?

With a savings account, the interest rate is usually one of the most important things to consider. That’s because the higher the interest rate, the more money you’ll earn on your account balance over time. And with a fixed interest rate, you can be sure that your interest rate won’t change, no matter what happens in the market.

Earn The Highest Interest Rates On Savings Today

Fixed annuities are almost identical to Certificates of Deposit (CDs) accounts and provide higher interest rates and penalty-free withdrawals for income.

TermInsurance CompanyAPY
N/AMoney Market Account – Optimum Bank5.26%
N/AMoney Market Account – FVC Bank5.26%
N/ASavings Account – CloudBank 24/7 5.26%
12 MonthsBread Savings CD5.50%
48 MonthsClear Spring Fixed Annuity5.15%
5 YearsAthene Fixed Annuity5.30%
10 YearsEquitrust Fixed Annuity6.00%
*Fixed annuities are only for saving money to use in retirement.

Disclaimer: This is a review. The Annuity Expert is not associated with a bank or credit union. However, fixed annuities are sold at most financial institutions. We aim to help you find the highest interest rates for your retirement savings. We may receive a small referral fee if you purchase something using a link in this guide.

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Types Of Savings Accounts That Earn A Fixed Interest Rate

There are a few different types of savings accounts that offer fixed interest rates.

One is a traditional savings account, which typically has a lower interest rate than other accounts.

But if you’re looking for a higher interest rate, you might consider a money market account or a certificate of deposit (CD).

Compare CD Rates From 423 Banks And Credit Unions

Find the highest interest rates for your savings from 3 months to 5 years.

Finally, if you want a fixed interest rate for retirement, consider a fixed annuity. They offer the highest rates.

Compare Fixed Annuity Rates

Find the highest interest rates for your savings ranging from 2 to 10 years.

With a traditional savings account, the interest rate is usually one of the most important things to consider. That’s because the higher the interest rate, the more money you’ll earn on your account balance over time. And with a fixed interest rate, you can be sure that your interest rate won’t change, no matter what happens in the market.

Next Steps

Now that you understand the basics of fixed interest rates, it’s time to start looking for a savings account that fits your needs. We can help you compare different accounts and find one with the best interest rate. Just remember to consider other factors like fees and account minimums. And once you’ve found the perfect account, stick to your savings plan to reach your financial goals.

Use our compound interest annuity calculator to get estimates. Contact us today for a quote on our services—we’re here to help!

What Is A Fixed Interest Rate, And How Does It Work? (2023)

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Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

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

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