Best Fixed Annuity Rates in 2026: How MYGAs Stack Up Against CDs
Top fixed annuity (MYGA) rates for 2026, broken down by term length. See how they compare to CDs, what the surrender penalties cost, and which insurers are paying the most.
Why Fixed Annuity Rates Are Worth a Look in 2026
Fixed annuities — sold today almost exclusively as Multi-Year Guaranteed Annuities (MYGAs) — function much like CDs from an insurance company. You hand over a lump sum, the insurer guarantees an interest rate for a set number of years, and at the end of the term you can withdraw, renew, or annuitize.
With short-term rates having peaked in late 2024 and slowly drifting down through 2025, MYGA rates in 2026 are still attractive — and in many cases, they're paying noticeably more than comparable bank CDs. The American Council of Life Insurers reports that fixed annuity sales have set new records for four consecutive years, driven largely by retirees rolling over IRA money for guaranteed, tax-deferred growth.
Before locking in a multi-year contract, it's worth comparing your options against today's best high-yield savings rates and CD ladders.
Fixed Annuity vs. CD: 2026 Snapshot
Top Fixed Annuity Rates by Term (2026)
Rates change weekly and vary by state, premium size, and insurer financial strength. The table below reflects the top-of-market rates available in most states as of Q1 2026. Always confirm the current rate and insurer rating before committing.
| Term | Top APY | Typical Range | Best for |
|---|---|---|---|
| 2 years | 5.05% | 4.50%–5.05% | Short bridge to a known expense |
| 3 years | 5.20% | 4.75%–5.20% | Conservative income laddering |
| 5 years | 5.30% | 4.85%–5.30% | Most popular term; sweet spot |
| 7 years | 5.40% | 5.00%–5.40% | Long-horizon tax-deferred growth |
| 10 years | 5.50% | 5.05%–5.50% | Pre-retirees with no liquidity needs |
MYGA vs. CD: The Real Side-by-Side
The headline rate is just the start. The right comparison includes taxes, liquidity, and insurance.
| Feature | MYGA | Bank CD |
|---|---|---|
| Typical 5-yr APY (top) | 5.30% | 4.55% |
| Tax treatment | Tax-deferred | Taxable annually |
| Insurance | State guaranty assn. ($250K–$500K) | FDIC ($250K per depositor/bank) |
| Free withdrawal | Usually 10% per year | None — full penalty |
| Early-exit penalty | Surrender charge (7%/yr declining) | 3–12 months interest |
| Minimum deposit | $5,000–$25,000 | $0–$500 |
| Best account holder | IRA / non-qualified retiree | Anyone with idle cash |
Understanding Surrender Charges
Every MYGA has a surrender-charge schedule. Most allow a 10% free withdrawal each year — meaning you can take out up to 10% of the account value without penalty. Anything above that during the surrender period triggers a fee that typically starts at 7%–9% in year 1 and steps down by one percentage point per year.
A typical 5-year MYGA surrender schedule:
- Year 1: 7%
- Year 2: 6%
- Year 3: 5%
- Year 4: 4%
- Year 5: 3%
- Year 6+: 0%
The surrender period often extends one year past the guarantee period. After the surrender period, you can withdraw the full balance penalty-free.
Insurer Strength: Don't Chase Rate at the Expense of Safety
MYGAs are not FDIC-insured. They're backed by the claims-paying ability of the issuing insurer, with a backstop from your state's life insurance guaranty association (most states cover $250,000 of annuity value, some go to $500,000).
The two ratings to check are:
- AM Best — the dominant insurance-industry rater. Look for A- or higher for a MYGA you'll hold 5+ years.
- S&P / Moody's — useful confirmation; look for A or higher.
A 5.50% rate from a B+ insurer is almost never worth the 0.25% extra yield over a 5.25% rate from an A+ insurer. The whole point of a fixed annuity is guaranteed safety.
Who Should Buy a MYGA in 2026?
The Honest Trade-Offs
- Higher guaranteed APY than top CDs in most terms
- Tax-deferred growth in non-qualified accounts
- 10% annual free withdrawal in most contracts
- No annual fees — what you see is what you get
- Surrender charges lock you in for the full term
- Not FDIC-insured (state guaranty backstop only)
- 10% IRS penalty on withdrawals before age 59½
- Renewal rates after the guarantee period are often lower
A MYGA is a particularly good fit if you are:
- Retired or near-retired and want a known interest rate without market risk
- Sitting on idle cash in a taxable brokerage account that you won't need for 3–10 years
- Rolling over IRA money and want a tax-deferred, principal-protected vehicle
- Building a CD/MYGA ladder with maturities staggered every 1–2 years
A MYGA is a poor fit if you are:
- Under 59½ and don't want to deal with the 10% IRS penalty on any withdrawals
- Likely to need the principal in the next 3–5 years
- Looking for growth beyond the credited rate (consider an indexed annuity or a balanced portfolio instead)
How to Buy a Fixed Annuity
MYGAs are sold through licensed insurance agents, fee-only fiduciaries, and a handful of direct-to-consumer fintech platforms. Comparison platforms like Blueprint Income, Stan The Annuity Man, and Gainbridge let you screen by term, APY, and insurer rating in one place.
Whichever channel you use, get the following before signing:
- The exact APY and guarantee period in writing.
- The full surrender-charge schedule (year by year).
- The free-withdrawal provision (most are 10%/year — confirm).
- The insurer's current AM Best rating.
- A specimen contract you can read in full before paying premium.
The Bottom Line
For most conservative savers comparing 3- to 10-year guaranteed-rate options in 2026, a MYGA from an A-rated insurer is paying meaningfully more than the best bank CD — usually 50–100 basis points more, plus tax deferral. The trade-off is liquidity: surrender charges are real, and you'll pay a 10% IRS penalty if you withdraw before age 59½.
If you can match the term to a known time horizon, a fixed annuity belongs on your shortlist alongside CDs and high-yield savings accounts.
Frequently asked questions
- Both are very safe. A CD is FDIC-insured up to $250,000 per depositor, per bank. A MYGA is backed by the insurer and a state guaranty association (usually up to $250,000 of annuity value). For amounts within those limits at strong institutions, the practical safety difference is minimal.
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