Insurance-backed, not FDIC
Fixed annuities: higher rates, longer locks
A multi-year guaranteed annuity (MYGA) pays a fixed rate for 3 to 5 years, like a CD from an insurance company. Rates are higher than CDs and the interest is tax-deferred. The trade-offs: your money is locked, early withdrawals cost a surrender charge, and it’s backed by the insurer, not the FDIC.
Not FDIC-insured. Rates are from a public annuity rate table, not the insurers’ own pages, and vary by state and deposit size. Confirm with the insurer or a licensed agent before buying. We take no fees on annuities.
Rates from A+ rated insurers today: Athene 3-year fixed annuity 5.75%; Nationwide 4-year fixed annuity 5.50%; Athene 5-year fixed annuity 6.05%; Reliance Standard 5-year fixed annuity 5.85%.
Annuity or CD?
Fixed annuity
Higher rate for 3–5 years, tax-deferred until withdrawn. Backed by the insurer; surrender charges and a 10% IRS penalty before 59½ on early interest.
CD
Lower rate, FDIC-insured to $250,000 per bank. Interest is taxed every year. Early withdrawal costs a few months of interest.
Treasury note
Backed by the U.S. government, free of state tax, and can be sold any day at market price. How to buy →
Before you buy
- Check the insurer’s rating (AM Best A or better is the usual bar) and your state’s guaranty association limit.
- Read the surrender schedule and whether there’s a market value adjustment.
- Ask about the free withdrawal amount each year; some allow 10%, some none.
- Only use money you won’t need for the full term, and ideally won’t touch before 59½.
Questions
What is a fixed annuity (MYGA)?
A multi-year guaranteed annuity is a contract with an insurance company that pays a fixed rate for a set number of years, much like a CD. It is backed by the insurer, not the FDIC.
Are fixed annuities safe?
They depend on the insurer’s ability to pay. Ratings from AM Best are a guide, and each state has a guaranty association that covers annuities up to a limit (often $250,000 per person per insurer, but it varies by state). We list only insurers rated A+ or better.
Can I get my money out early?
Usually only a small amount each year, if any, without a surrender charge. Taking more costs a surrender charge, and some contracts add a market value adjustment. Before age 59½, the IRS also adds a 10% penalty on interest withdrawn.
How are fixed annuities taxed?
Interest grows tax-deferred and is taxed as ordinary income, federal and state, when you withdraw it. There is no state-tax break like Treasuries have.
Annuity rates from the MyAnnuityStore rate table, checked October 29, 2026; insurers rated A+ or better by AM Best, compound-interest products only. Treasury yield: U.S. Treasury, November 6, 2026. Not investment, tax or insurance advice.