The best fixed-rate annuities provide competitive interest rates and favorable terms, offering insights that can assist in planning for a secure financial future.
Fixed-rate annuities are a secure investment option that offers guaranteed interest rates over a set period, making them appealing to conservative investors seeking predictable returns and a reliable income, particularly for retirement. Their simplicity also aids individuals in planning for their financial futures without the volatility of other investments.
Higher rates in fixed-rate annuities lead to greater earnings over the contract's duration, but it's important to choose a financially stable company since these annuities are not FDIC insured. Look for high ratings from independent agencies to ensure reliability. Benzinga has reviewed some of the best fixed annuity rates available this month.
Compare the Best Fixed Annuity Rates of October 2024
Learn the best rates for fixed annuities available for this month. Compare your top options before investing your funds.
| Term | Company | AM Best Rating | Rate |
| 2 years | Oceanview Life | A | 4.75% |
| Up to 10 years | American National | A | 4.90% |
| 3 years | North American | A+ | 4.55% |
| 3 years | New York Life | A++ | 3.95% |
| 3 years | Global Atlantic | A | 4.40% |
| 3 years | Pacific Guardian Life | A | 4.00% |
| 3 years | Securian Life | A+ | 4.00% |
| 3 years | Royal Neighbors of America | A | 4.75% |
| 3 years | Symetra | A | 4.30% |
| 3 years | Jackson National | A | 4.25% |
The Best Fixed Rate Annuities
It’s essential to understand the various features, terms, and benefits that different annuities offer. Here are the top providers of the best fixed rate annuities for this month.
1. Oceanview Life and Annuity Company
If you’re close to retirement or looking for a place to park some funds for a short period, Oceanview Life can be a good option because its term is only two years. Its Harbourview 2 annuity product offers an interest rate of 4.75% with a required minimum investment of $20,000. It also has lower agent commissions than some other companies, which means you pay less in fees. The company has an A rating from AM Best, meaning your money should be fairly safe during those two years.
2. American National Insurance Company
You’ll enjoy one of the best fixed annuity rates from a stable and reliable insurance company. Palladium MYG is a fixed annuity that can be guaranteed for 3, 5, 6, 7 or even 10 years. The initial deposit required for the10-year term is $5,000 to earn an interest rate of 4.90%. Purchase this annuity from anywhere in the United States, including Washington, D.C. The company has a low customer complaint rating and is respected in the industry.
3. North American Company for Life and Health
The company dates back to 1886 and has been a stable, reliable company ever since. With an AM Best rating of A+, it is one of the most financially stable companies you’ll find. The company has many annuity product options. The Guarantee Plus 3 is what earns 4.55% with a 3-year term. You’ll need to be prepared to invest a minimum of $20,000. The maximum you can invest is $1 million. After the first year, you can take interest-only withdrawals. That means you can take out of the earnings from the annuity from the first year without penalties as long as you leave the principal.
4. New York Life Insurance Company
Ratings don’t get better than A++. So while New York Life Insurance Company might not have the highest fixed annuity rates on this list, it is one of the most stable options available and the rates are still higher than many of its competitors. The Secure Term Choice Fixed Annuity II is what earns 3.95% with a 3-year term. You’ll need to invest a minimum initial premium of $5,000. The annuity maxes out at $1.5 million. Each year, you can take up to 10% of the account balance without penalties.
5. Global Atlantic Financial Group
One nice feature of the SecureFore 3 product from Global Atlantic is that you can invest just $10,000. The current interest rate for a 3-year term is 4.40%. Many other insurance products on this list require a greater investment to get started. You can withdraw up to 10% of the account balance without facing penalties each year.
6. Pacific Guardian Life Insurance Company
Invest $10,000 to $1 million in a Diamond Head 3 annuity and enjoy above-average yields. The plan allows for the withdrawal of up to 10% of the account balance each year without facing penalties. Purchase this annuity up until you are age 85 to earn good interest on your savings. To satisfy a required minimum distribution (RMD), the company will waive the surrender charges.
7. Securian Life Insurance Company
Since 1880, Securian has been offering financial tools to help people manage their wealth. The company’s success is evidenced by its A+ rating with AM Best. To purchase their SecureOption Choice 3 annuity product, you’ll need at least $25,000 with a maximum investment of $2 million. Withdraw up to 10% each year without penalties once you’ve completed the first year of your contract.
8. Royal Neighbors of America
While there are higher-rated companies out there, Royal Neighbors of America has been in business since 1895, showing its longevity and reliability. Its MYGA 3 product is available until you reach age 85 and allows for withdrawal of the account’s interest after you complete the first year of the contract without paying any penalties.
9. Symetra Life Insurance Company
Invest $25,000-$1 million in Symetra Select Max 3 until you reach age 85. The company has been in business since 1957 and been providing reliable insurance products. You can withdraw up to 10% of the account balance starting after the first year of the contract without paying penalties on the withdrawals.
10. Jackson National Life Insurance Company
You can place a minimum of $10,000 to a maximum of $1 million in a fixed annuity with Jackson National Life Insurance Company. RateProtector 3 offers an interest rate of 4.25% for a 3-year term. Plus, enjoy the option to withdraw up to 10% of the account value after the first year of the contract with no penalties. While there are higher-rated carriers available, Jackson National has been in operation since 1961 and helps manage many annuities for customers. The company will eliminate surrender charges to comply with the required minimum distribution (RMD).
What Is a Fixed Annuity?
A fixed annuity is a type of insurance that guarantees a flat rate of return on the buyer’s contributions. This differs from a variable annuity, which has interest rates that fluctuate as the investments perform better or worse.
This annuity can provide peace of mind for investors that their money is safe, kind of like a certificate of deposit (CD). It is a low-risk place to put funds that grow at a set interest rate until you pull them.
Types of Fixed Annuity Rates
Once you’ve decided you want a fixed annuity, you have two main options: traditional fixed annuity and fixed index annuity.
- With a traditional fixed annuity, your interest rate is listed in the contract and remains for the duration of the policy.
- Fixed Index Annuities protect your principal and accrued interest from stock market downturns. This type of annuity gets its interest rates from the stock index.
How Does a Fixed Annuity Work?
When purchasing a fixed annuity, you have options to pay into it with a lump sum or to make payments monthly. In turn, the insurance company guarantees that you’ll receive a set interest rate during the accumulation phase. The funds grow tax-deferred until you take payments. You’ll then only pay taxes on the accumulated funds and not the principal funds you put in the account. This tax-deferral feature can be a significant advantage for individuals looking to maximize their retirement savings. If you purchase an annuity through a qualified retirement plan, the entire payment could be tax-free.
Once you’ve completed the accumulation phase, you can select when you want to start receiving income from the annuity and for how long. The insurance company will use that information to calculate your monthly payout during the payout phase. Payout phases can last for the rest of the account holder’s life or for a set number of years depending on the contract you’ve selected.
The payout amount will vary greatly based on the contract. If you place $100,000 in an immediate income annuity with an interest rate of 5% at age 65, your payments would be approximately $614 for 10 years.
If you elected to have a lifetime payout that you started taking payments from starting at age 70, your payments on the annuity would be closer to $1,050 per month.
Pros and Cons of Fixed Rate Annuities
As you look at best fixed rate annuities and are deciding the best place to put your funds, consider the pros and cons this can provide.
Advantages
- Predictable returns: You are guaranteed the interest rate advertised when you purchase a fixed annuity. That’s because it is a contract. Your money will be invested in corporate and government bonds.
- Tax-deferred growth: Instead of placing your funds directly in the stock market where you’ll need to pay taxes on the earnings each year, you’ll enjoy only paying taxes once you take withdrawals.
- Guaranteed income: You’ll know exactly how much you’ll make each month from the annuity during the payout period. This can help you plan for retirement.
- Safety of the principal funds you placed in the annuity: While the annuity is not federally insured, it is relatively safe so long as you select a financially stable insurance company to purchase an annuity with.
Disadvantages
- Funds are illiquid: You can’t take the funds until the payout period unless you have a qualifying financial emergency and even then, you might miss out on some of the account’s earnings.
- Tax penalties for early withdrawals: If you take the funds before the payout period, you might have to pay a 10% tax penalty in addition to the income tax you’d have to pay on the account’s earnings.
- Fees: You’ll be committing to paying fees as part of your annuity. Factor that in when deciding how much you’ll earn over the course of the contract to decide if it is the best investment option for your funds.
How to Find the Best Fixed Rate Annuities
When placing your funds in an annuity, you want to know that you’ve maximized your earning potential with the best rates. To do so, here’s a look at some ways to ensure you’ve found the best insurance company and rates to place your money with.
- Find the most reputable companies: An annuity is only as good as the company that issues it. If it’s a new insurance company or one that is struggling financially, you could lose your principal if it goes under. Instead of focusing solely on interest rates, start by focusing on the company and then selecting a good rate from there.
- Get fixed annuity rates from reliable companies: Once you have a short list of top annuity companies that you feel comfortable doing business with, you can get rates from them to start evaluating the best option for you.
- Factor in fees: Each insurance company will charge different fees to invest your funds. Look at the annuity fees to evaluate the total cost of the contract to see if it will be worth it.
- Evaluate payout amounts: Decide how the payouts will work for you based on terms and conditions. See if the timeline matches when you’ll need your funds and if the interest will have helped it grow to the point where you’ll be happy with the payout.
- Consider other benefits: Annuities have different features that can be customized, including a death benefit. This provides an insurance-like payout when the annuitant passes away.
Guaranteed Income for Retirement
Most retirement income is variable based on how the account and investments perform. But that isn’t the case with a fixed annuity. That can provide peace of mind to account holders and help them calculate their income to know when they’re ready to retire and how comfortably they’ll be able to live.
Frequently Asked Questions
What factors influence annuity rates?
The largest influences on annuity rates are economic conditions, the bond market and monetary policy.
What's the difference between a fixed annuity and a CD?
CD accounts are through banks that have federal insurance, meaning your funds are protected should the bank fail. In contrast, annuities are through insurance companies and the federal government does not insure them.
What is the highest-rated annuity company?
Some of the highest-rated annuity companies include MassMutual, Fidelity Investments, Allianz Life and New York Life Insurance.
How much does a $100,000 fixed annuity pay per month?
This depends on various factors such as the length of the annuity term, interest rates, and any fees associated with the annuity. However, a rough estimation can be made by dividing the total annuity amount by the number of months in the annuity term.
About Rebekah Brately
Rebekah Brately is an investment writer passionate about helping people learn more about how to grow their wealth. She has more than 12 years of writing experience, focused on technology, travel, family and finance. Her work has been published in Benzinga, Hearst Bay Area, FreightWaves and Dallas Observer publications.