Fixed Annuity Rates: What You Are Actually Being Quoted
Two different products get sold under the phrase “fixed annuity rate,” and the difference between them is the whole story.
The two products
A multi-year guaranteed annuity (MYGA) guarantees one rate for the full term — 5% for five years means 5% in year five. A traditional fixed annuity may guarantee a rate for the first year only and then reset annually at the carrier's discretion, floored by a contractual minimum that is often 1% to 3%.
Both are legitimate. But a quoted “5.4% fixed annuity” means something very different depending on which one you are looking at, and the second is where people are surprised in year two. If certainty is the reason you are here, you want the MYGA. See MYGA rates.
What the guaranteed minimum actually protects
Every fixed annuity carries a guaranteed minimum interest rate. It is a floor against catastrophe, not a promise of a competitive rate. A contract crediting 5.4% today with a 1.5% guaranteed minimum can legally credit 1.5% at renewal. That is the number to find in the contract before you sign, not after.
New money versus renewal
| New-money rate | Renewal rate | |
|---|---|---|
| Who gets it | New deposits | Existing contracts at term end |
| How it is set | Competitively, to win the deposit | At the carrier's discretion, above the contractual floor |
| Typical gap | — | Frequently well below the new-money rate |
| Your move | Shop it | Renew, take it, or 1035 to a better carrier tax-free |
Carriers are not required to phone you at maturity. Calendar the date when you fund the contract. A 1035 exchange moves the money to a new carrier without triggering tax, which is the lever most people never use.
What moves the rate you are offered
- Term. Longer usually pays more, but not always — the curve is not straight and a 5-year sometimes beats a 7.
- Deposit band. Many carriers pay more above $100,000. Landing just under a break costs real yield.
- State. Product availability and rates differ by state; the best national rate may not be for sale where you live.
- Carrier rating. The top of any rate sheet is usually a smaller carrier. That is a real trade, not a free lunch.
- Riders. Anything added — income riders, enhanced death benefits — is paid for out of the credited rate.
Comparing against what you already hold
Most people arrive here holding a CD, a money market fund or a high-yield savings account. The honest comparison is after tax and after liquidity, not headline to headline. A fixed annuity defers the tax; a CD and an MMF do not. A savings account is liquid tomorrow; a fixed annuity is not for several years. Read annuity vs CD before deciding, and check the current HYSA and money market numbers so you are comparing against today's alternative rather than last year's.
Related reading
Want my independent take on whether this fits your situation?
I'm Hans Goldstein — independent licensed insurance producer (NPN 20602398), appointed with multiple A-rated carriers. I run side-by-side comparisons against CDs, MYGAs, Treasuries, and MMFs every week for retirees and pre-retirees. Tell me what you're considering and I'll send back a written comparison.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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FAQ
What is the current fixed annuity rate?
In September 2026 multi-year guaranteed annuities top out around 6.3% on a 5-year term, with most A-rated carriers between 5.0% and 5.75%. Traditional fixed annuities that reset annually generally credit less, because you are paying for flexibility.
Is a fixed annuity rate guaranteed for life?
Only for the guarantee period stated in the contract. After that the carrier sets a renewal rate, subject to a contractual guaranteed minimum that is usually far below market. The renewal is where most of the disappointment happens.
What is the difference between a fixed annuity and a MYGA?
A MYGA is a fixed annuity where the rate is guaranteed for the entire surrender term. A traditional fixed annuity may guarantee a rate for only the first year and reset after that. Same family, very different certainty.
Are fixed annuity rates negotiable?
The rate is not, but the product is. Carriers publish different rates by term, deposit band and state, and moving across those levers changes what you are offered materially.