The Best Deferred Fixed Annuity Rates For May 2024

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 6.00% for a 3-year surrender charge period.

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

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).

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.

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

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

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.

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

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.

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.

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.

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

At least $5,000.

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.

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.

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

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

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.

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.

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.

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.

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.

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

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.

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

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.

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.