Terry Turner, writer and researcher for RetireGuide
  • Written by
    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner has more than 30 years of journalism experience, including covering benefits, spending and congressional action on federal programs such as Social Security and Medicare. He is a Certified Financial Wellness Facilitator through the National Wellness Institute and the Foundation for Financial Wellness and a member of the Association for Financial Counseling & Planning Education (AFCPE®).

    Read More
  • Edited By
    Lamia Chowdhury
    Lamia Chowdhury, editor for RetireGuide.com

    Lamia Chowdhury

    Financial Editor

    Lamia Chowdhury is a financial content editor for RetireGuide and has over three years of marketing experience in the finance industry. She has written copy for both digital and print pieces ranging from blogs, radio scripts and search ads to billboards, brochures, mailers and more.

    Read More
  • Published: June 3, 2020
  • Updated: December 6, 2022
  • 9 min read time
  • This page features 19 Cited Research Articles
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How to Cite RetireGuide.com's Article

APA Turner, T. (2022, December 6). Annuity Rates For December 2022. RetireGuide.com. Retrieved December 6, 2022, from https://www.retireguide.com/annuities/rates/

MLA Turner, Terry. "Annuity Rates For December 2022." RetireGuide.com, 6 Dec 2022, https://www.retireguide.com/annuities/rates/.

Chicago Turner, Terry. "Annuity Rates For December 2022." RetireGuide.com. Last modified December 6, 2022. https://www.retireguide.com/annuities/rates/.

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We’re dedicated to providing thoroughly researched annuity information that guides you toward making the best possible financial decisions for you and your family.

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Key Takeaways
  • Annuity rates fluctuate weekly and multi-year guaranteed annuities change daily. Choose how you want to receive payments and when, then you can get a general idea of a good interest rate range.
  • The different surrender period lengths are correlated with high and low annuity rates.
  • It's equally important to consider the company selling the annuity. A high-interest rate won't matter if that company goes broke or files for bankruptcy.

Best Annuity Rates Week of December 5

Multiyear guaranteed annuities are a fixed annuity that locks in a stable interest rate for a specified time period. Surrender periods last three to 10 years.

Below are examples of the best annuity rates as of December 2022.

2-Year Annuity Rates

Product Name Rate AM Best Rating Apply
Harbourview 2 High Band 4.30% A- Details
Product Name Rate AM Best Rating Apply
Platinum Assure 2 4.30% A Details
Product Name Rate AM Best Rating Apply
Harbourview 2 (CA) High Band 4.20% A- Details
Product Name Rate AM Best Rating Apply
Harbourview 2 Low Band 3.95% A- Details
Product Name Rate AM Best Rating Apply
Harbourview 2 (CA) Low Band 3.85% A- Details
Product Name Rate AM Best Rating Apply
Secure Savings Elite 2 3.15% B+ Details
Product Name Rate AM Best Rating Apply
Secure Savings Elite 2 (FL) 2.70% B+ Details
Product Name Rate AM Best Rating Apply
Secure Savings 2 Year 2.60% B+ Details
View all 8

3-Year Annuity Rates

Product Name Rate AM Best Rating Apply
SecureFore 3 High Band 5.00% A Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 3 High Band 4.85% A Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 3 State Specific High Band 4.85% A Details
Product Name Rate AM Best Rating Apply
Bankers Elite 3 4.80% A- Details
Product Name Rate AM Best Rating Apply
Bankers Elite 3 4.80% A- Details
Product Name Rate AM Best Rating Apply
Harbourview 3 High Band 4.75% A- Details
Product Name Rate AM Best Rating Apply
Harbourview 3 (CA) High Band 4.65% A- Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 3 Low Band 4.60% A Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 3 State Specific Low Band 4.60% A Details
Product Name Rate AM Best Rating Apply
Bankers 3 4.50% A- Details
Product Name Rate AM Best Rating Apply
FG Guarantee-Premium 3 4.50% A- Details
Product Name Rate AM Best Rating Apply
SecureFore 3 Low Band 4.50% A Details
Product Name Rate AM Best Rating Apply
Multi-Select 3 4.45% A Details
Product Name Rate AM Best Rating Apply
Harbourview 3 Low Band 4.40% A- Details
Product Name Rate AM Best Rating Apply
NAC Guarantee Plus 3 High Band 4.40% A+ Details
Product Name Rate AM Best Rating Apply
GuaranteeShield 3 Low Band 4.35% A- Details
Product Name Rate AM Best Rating Apply
Harbourview 3 (CA) Low Band 4.30% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 3 High Band 4.05% A Details
Product Name Rate AM Best Rating Apply
NAC Guarantee Plus 3 Low Band 3.95% A+ Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 High Band 3.90% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 FL High Band 3.90% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 3 Mid Band 3.90% A Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 CA High Band 3.85% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 3 Low Band 3.80% A Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 Mid Band 3.65% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 FL Mid Band 3.65% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 CA Mid Band 3.60% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG 3 NY Mid Band 3.15% A Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 Low Band 2.90% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 FL Low Band 2.90% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 3 CA Low Band 2.85% A- Details
View all 31

4-Year Annuity Rates

Product Name Rate AM Best Rating Apply
Harbourview 4 High Band 5.00% A- Details
Product Name Rate AM Best Rating Apply
Harbourview 4 (CA) High Band 4.85% A- Details
Product Name Rate AM Best Rating Apply
Multi-Select 4 4.70% A Details
Product Name Rate AM Best Rating Apply
Harbourview 4 Low Band 4.65% A- Details
Product Name Rate AM Best Rating Apply
Harbourview 4 (CA) Low Band 4.50% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 High Band 4.10% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 FL High Band 4.10% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 CA High Band 4.05% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 Mid Band 3.85% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 FL Mid Band 3.85% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 CA Mid Band 3.80% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 Low Band 3.30% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 FL Low Band 3.30% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 4 CA Low Band 3.25% A- Details
View all 14

5-Year Annuity Rates

Product Name Rate AM Best Rating Apply
Platinim Assure 5 5.40% A Details
Product Name Rate AM Best Rating Apply
Platinim Assure 5 CA 5.40% A Details
Product Name Rate AM Best Rating Apply
SecureFore 5 High Band 5.40% A Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 5 High Band 5.35% A Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 5 State Specific High Band 5.30% A Details
Product Name Rate AM Best Rating Apply
RetireMax Secure 5 5.25% A+ Details
Product Name Rate AM Best Rating Apply
FG Guarantee-Platinum 5 5.20% A- Details
Product Name Rate AM Best Rating Apply
Bankers Elite 5 5.10% A- Details
Product Name Rate AM Best Rating Apply
Bankers Elite 5 5.10% A- Details
Product Name Rate AM Best Rating Apply
Harbourview 5 High Band 5.10% A- Details
Product Name Rate AM Best Rating Apply
Bankers 5 Premier 5.00% A- Details
Product Name Rate AM Best Rating Apply
Bankers 5 Premier 5.00% A- Details
Product Name Rate AM Best Rating Apply
Bankers 5 Premier Plus 5.00% A- Details
Product Name Rate AM Best Rating Apply
Lincoln MYGuarantee Plus 5 Low Band 5.00% A+ Details
Product Name Rate AM Best Rating Apply
Ultra Premier 5 5.00% A+ Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 5 Low Band 4.95% A Details
Product Name Rate AM Best Rating Apply
Eleos MVA 4.95% A++ Details
Product Name Rate AM Best Rating Apply
Harbourview 5 (CA) High Band 4.95% A- Details
Product Name Rate AM Best Rating Apply
Reliance Guarantee - 5 4.95% A++ Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 5 Annuity - No GROP with MVA High Band 4.90% A Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 5 State Specific Low Band 4.90% A Details
Product Name Rate AM Best Rating Apply
SecureFore 5 Low Band 4.90% A Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 5 High Band 4.85% A Details
Product Name Rate AM Best Rating Apply
Eleos SP 4.80% A++ Details
Product Name Rate AM Best Rating Apply
Harbourview 5 Low Band 4.75% A- Details
Product Name Rate AM Best Rating Apply
Bankers 5 4.70% A- Details
Product Name Rate AM Best Rating Apply
Bankers 5 4.70% A- Details
Product Name Rate AM Best Rating Apply
Multi-Select 5 4.70% A Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 5 Mid Band 4.70% A Details
Product Name Rate AM Best Rating Apply
SecureGain 5 Low Band 4.70% A+ Details
Product Name Rate AM Best Rating Apply
NAC Guarantee Plus 5 High Band 4.65% A+ Details
Product Name Rate AM Best Rating Apply
Harbourview 5 (CA) Low Band 4.60% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 5 Low Band 4.60% A Details
Product Name Rate AM Best Rating Apply
Ultra - Secure Plus 5 High Band 4.60% A+ Details
Product Name Rate AM Best Rating Apply
SecureGain 5 High Band 4.55% A+ Details
Product Name Rate AM Best Rating Apply
Lincoln MYGuarantee Plus 5 High Band 4.50% A+ Details
Product Name Rate AM Best Rating Apply
SecureGain 5 No MVA High Band 4.50% A+ Details
Product Name Rate AM Best Rating Apply
Ultra - Secure Plus 5 Low Band 4.45% A+ Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 5 Annuity - No GROP High Band 4.40% A Details
Product Name Rate AM Best Rating Apply
NAC Guarantee Plus 5 Low Band 4.40% A+ Details
Product Name Rate AM Best Rating Apply
SecureGain 5 No MVA Low Band 4.40% A+ Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 5 Annuity - GROP with MVA High Band 4.35% A Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 5 Annuity - GROP High Band 4.25% A Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 High Band 4.25% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 FL High Band 4.25% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 CA High Band 4.20% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 Mid Band 4.00% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 FL Mid Band 4.00% A- Details
Product Name Rate AM Best Rating Apply
Secure Savings Elite 5 4.00% B+ Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 CA Mid Band 3.95% A- Details
Product Name Rate AM Best Rating Apply
Secure Savings Elite 5 (FL) 3.60% B+ Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 Low Band 3.55% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 FL Low Band 3.55% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 5 CA Low Band 3.50% A- Details
Product Name Rate AM Best Rating Apply
Secure Savings 5 Year 3.45% B+ Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 5 Annuity - No GROP with MVA Low Band 3.00% A Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 5 Annuity - GROP with MVA Low Band 2.75% A Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 5 Annuity - No GROP Low Band 2.75% A Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 5 Annuity - GROP Low Band 2.60% A Details
View all 59

6-Year Annuity Rates

Product Name Rate AM Best Rating Apply
Harbourview 6 High Band 5.10% A- Details
Product Name Rate AM Best Rating Apply
Multi-Select 6 5.00% A Details
Product Name Rate AM Best Rating Apply
Harbourview 6 (CA) High Band 4.95% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 6 High Band 4.90% A Details
Product Name Rate AM Best Rating Apply
Harbourview 6 Low Band 4.75% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 6 Mid Band 4.75% A Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 6 Low Band 4.65% A Details
Product Name Rate AM Best Rating Apply
Harbourview 6 (CA) Low Band 4.60% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 High Band 4.25% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 FL High Band 4.25% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 CA High Band 4.20% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 Mid Band 4.05% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 FL Mid Band 4.05% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 CA Mid Band 4.00% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 Low Band 3.70% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 FL Low Band 3.70% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 6 CA Low Band 3.65% A- Details
View all 17

7-Year Annuity Rates

Product Name Rate AM Best Rating Apply
Athene Max Rate 7 High Band 5.40% A Details
Product Name Rate AM Best Rating Apply
FG Guarantee-Platinum 7 5.40% A- Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 7 State Specific High Band 5.35% A Details
Product Name Rate AM Best Rating Apply
Harbourview 7 High Band 5.10% A- Details
Product Name Rate AM Best Rating Apply
Lincoln MYGuarantee Plus 7 High Band 5.05% A+ Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 7 Low Band 5.00% A Details
Product Name Rate AM Best Rating Apply
Bankers 7 Premier 5.00% A- Details
Product Name Rate AM Best Rating Apply
Bankers 7 Premier 5.00% A- Details
Product Name Rate AM Best Rating Apply
Bankers Elite 7 5.00% A- Details
Product Name Rate AM Best Rating Apply
Bankers Elite 7 5.00% A- Details
Product Name Rate AM Best Rating Apply
Ultra Premier 7 5.00% A+ Details
Product Name Rate AM Best Rating Apply
Athene Max Rate 7 State Specific Low Band 4.95% A Details
Product Name Rate AM Best Rating Apply
Harbourview 7 (CA) High Band 4.95% A- Details
Product Name Rate AM Best Rating Apply
Reliance Guarantee - 7 4.95% A++ Details
Product Name Rate AM Best Rating Apply
Multi-Select 7 4.90% A Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 7 High Band 4.90% A Details
Product Name Rate AM Best Rating Apply
NAC Guarantee Plus 7 High Band 4.85% A+ Details
Product Name Rate AM Best Rating Apply
SecureGain 7 High Band 4.84% A+ Details
Product Name Rate AM Best Rating Apply
Harbourview 7 Low Band 4.75% A Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 7 Low Band 4.75% A Details
Product Name Rate AM Best Rating Apply
Bankers 7 4.70% A- Details
Product Name Rate AM Best Rating Apply
Bankers 7 4.70% A- Details
Product Name Rate AM Best Rating Apply
Ultra - Secure Plus 7 High Band 4.70% A+ Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 7 Mid Band 4.65% A Details
Product Name Rate AM Best Rating Apply
SecureGain 7 Low Band 4.64% A+ Details
Product Name Rate AM Best Rating Apply
SecureGain 7 No MVA Low Band 4.64% A+ Details
Product Name Rate AM Best Rating Apply
Harbourview 7 Low (CA) Band 4.60% A- Details
Product Name Rate AM Best Rating Apply
Lincoln MYGuarantee Plus 7 Low Band 4.55% A+ Details
Product Name Rate AM Best Rating Apply
NAC Guarantee Plus 7 Low Band 4.55% A+ Details
Product Name Rate AM Best Rating Apply
Ultra - Secure Plus 7 Low Band 4.55% A+ Details
Product Name Rate AM Best Rating Apply
SecureGain 7 No MVA High Band 4.54% A+ Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 7 Annuity - No GROP High Band 4.40% A Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 7 Annuity - GROP with MVA High Band 4.35% A Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 7 Annuity - GROP High Band 4.25% A Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 High Band 4.25% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 FL High Band 4.25% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 CA High Band 4.20% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 Mid Band 4.10% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 FL Mid Band 4.10% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 CA Mid Band 4.05% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 Low Band 3.75% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 FL Low Band 3.75% A- Details
Product Name Rate AM Best Rating Apply
Milestone MYGA 7 CA Low Band 3.70% A- Details
Product Name Rate AM Best Rating Apply
American Pathway Fixed 7 Annuity - No GROP Low Band 3.00% A Details
View all 44

8-Year Annuity Rates

Product Name Rate AM Best Rating Apply
Multi-Select 8 4.95% A Details

9-Year Annuity Rates

Product Name Rate AM Best Rating Apply
Bankers Elite 9 5.00% A- Details
Product Name Rate AM Best Rating Apply
Bankers Elite 9 5.00% A- Details
Product Name Rate AM Best Rating Apply
Multi-Select 9 4.95% A Details

10-Year Annuity Rates

Product Name Rate AM Best Rating Apply
American Pathway VisionMYG 10 High Band 5.15% A Details
Product Name Rate AM Best Rating Apply
American Pathway VisionMYG 10 High Band 5.15% A Details
Product Name Rate AM Best Rating Apply
Harbourview 10 High Band 5.10% A- Details
Product Name Rate AM Best Rating Apply
Multi-Select 10 5.00% A Details
Product Name Rate AM Best Rating Apply
Harbourview 10 (CA) High Band 4.95% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 10 High Band 4.90% A Details
Product Name Rate AM Best Rating Apply
Harbourview 10 Low Band 4.75% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 10 Mid Band 4.75% A Details
Product Name Rate AM Best Rating Apply
Palladium MYG Annuity 10 Low Band 4.65% A Details
Product Name Rate AM Best Rating Apply
Reliance Guarantee - 10 4.65% A++ Details
Product Name Rate AM Best Rating Apply
Harbourview 10 (CA) Low Band 4.60% A- Details
Product Name Rate AM Best Rating Apply
Palladium MYG 10 NY High Band 4.30% A Details
Product Name Rate AM Best Rating Apply
Palladium MYG 10 NY Mid Band 4.15% A Details
Product Name Rate AM Best Rating Apply
Palladium MYG 10 NY Low Band 4.05% A Details
Product Name Rate AM Best Rating Apply
American Pathway VisionMYG 10 Low Band 3.20% A Details
Product Name Rate AM Best Rating Apply
American Pathway VisionMYG 10 Low Band 3.20% A Details
Product Name Rate AM Best Rating Apply
Assured Edge Income Achiever 3.00% A Details
View all 17

What Is the Average Return on Annuities?

The average return on annuities varies based on several factors, including whether they are fixed annuities, variable annuities or equity-indexed annuities.

For fixed annuities, the average return depends on the annuity’s term. Typically, the longer the term, the higher the rate of return.

The return on a variable annuity depends on the performance of the investment options you choose, and it may be similar to the rates you’d see with an index fund. The average return for a variable annuity can be around 8% to 10% annually. But it can also fall below that if the investments perform poorly in a market downturn.

Equity-indexed annuities provide benefits of both fixed and variable annuities. They are tied to the performance of a specific index — such as the S&P 500 or Dow Jones Industrial Average. So the average return can be higher than the average fixed annuity return.

But equity-indexed annuities also provide a guaranteed minimum return — even if the stock market falters. Unlike a variable annuity, though, you don’t necessarily get the full effect of a stock market boom. The maximum return is also capped at a certain percentage. This helps pay for the guaranteed return during downturns.

Does Life Expectancy Affect Returns?

Life expectancy plays a role — along with interest rates — in your rate of return on an annuity. In short, the higher the interest rates are and the older you are when you buy an annuity — the larger the payout you’ll receive.

But it can be tricky coordinating your annuity purchase between rising interest rates and the right age.

Life expectancy plays a part in the payout you — and your beneficiaries — will receive from an annuity, depending on the type of annuity you buy.

Life Expectancy and Annuity Types
Single-Life Annuity
A single-life annuity pays out based on your life expectancy. It stops making payments when you die.
Joint-Life Annuity with Survivor Benefits
This type of annuity will continue making payments to your beneficiary after you die — or to you after your beneficiary dies. If you die first, your beneficiary will typically receive a lower payment. If the beneficiary dies first, you’ll continue receiving the full amount.
Joint-Life Annuity: Period-Certain
A joint-life annuity with a period-certain payout estimates how long you will live. You select a specific number of years for the run of the payments. If you die before that time, your beneficiary will continue receiving money for the duration of the contract.
Life Expectancy Calculator Mockup Calculate Your Life Expectancy
Life expectancy is a key factor in determining how much money you will need in retirement. Use our calculator to estimate how long you will live.

Comparing Annuity Rates

An annuity rate plays a direct role in your annuity payout, or how much money you receive from the insurance company. But other factors also contribute.

Factors that also influence the size of your annuity payouts include:
  • Age
  • Life expectancy
  • Sex
  • The type of annuity you purchase
  • How much money you invest
  • Extra features you purchase

Annuity rates are set by the insurance company that issues the contract.

The calculations some companies use to determine rates of return can be complex, so it’s important to ask questions along the way.

Make sure the broker or agent clearly explains the annuity rate formula. Check to confirm the rate will not fluctuate over time.

Rates on variable annuities, for example, can increase or decrease depending on the performance of underlying investments. Most variable annuities will offer a minimum guaranteed rate, but this protection may come at an additional cost.

Consult Independent Rating Agencies

It’s always important to buy annuities from financially strong insurance companies.

While a CD is purchased at a bank or credit union and insured by the Federal Deposit Insurance Corp., an annuity is backed only by the private insurer that issues it.

If that company goes broke or bust, you could lose money.

You can check a company’s financial strength by consulting nationally recognized impartial rating agencies. The most popular is A.M. Best, and the highest rating awarded by the agency is A++.

Most experts recommend vetting insurers with a rating of A- or above for long-term annuities.

Other rating agencies include Standard & Poor’s, Moody’s and Fitch.

A.M. Best and other agencies rate a company based on its ability to pay financial obligations and make good on claims down the road.

There is often a tradeoff between high grades from independent agencies and competitive rates. A company may offer a very attractive annuity rate — but the insurer’s financial history may not be as strong as its competitors.

If you’re in the market for an annuity, first determine how much money you want to invest. Then, shop around to explore various rates from dependable companies.

Get quotes from several potential providers — the same way you would for any major purchase.

Josh Curtis | 0:50 What would a 10-year annuity look like?
What would a 10-year annuity look like? - Featuring Josh Curtis
Our financial experts will help you find an annuity tailored to your needs.
Replay Video
Learn more about the structure of a 10-year annuity from Josh Curtis, founder and lead investment advisor of Clarity Financial LLC.

Will Annuity Rates Go Up in 2022?

Annuity rates have already been rising in 2022 as a result of the U.S. Federal Reserve announcing that it plans seven interest rate hikes during the year.

Insurance companies typically invest heavily in high-quality bonds. When interest rates rise, the returns on these bonds go up. And insurance companies are able to pass on the increase through annuities with higher rates as well.

The Federal Reserve announced that interest rates would come in 0.25% increases at each of its seven meetings in 2022 — with one potential 0.5% increase.

For every quarter percent increase, annuity income has the potential to increase 1.5% in 2022.

Other Considerations Beyond Annuity Rates

Annuity rates are just one factor to consider when buying an annuity. Ideally, you want to look for a high rate but also for low minimum investment amounts, low fees and annuities that are backed by a company with a history of financial stability.

What to Consider in Addition to Annuity Rates
Age
The older you are when you purchase an annuity, the higher your annual payout will be. This is because your life expectancy is shorter.
Fees
Understand the fees you’ll have to pay for administering your annuity and if you cash it out. These costs can hit you all at once if you cash out — up to 10% of the value of your annuity. Or they can add up over time in the case of administrative fees. Make sure you calculate the cost as part of your overall return.
Inflation
Inflation can eat up your annuity’s value over time. Consider an inflation-adjusted annuity that boosts the payouts over time. Understand, though, that it will significantly reduce your initial payouts. This means less money early in retirement but more as you age.
Interest Rates
Low interest rates translate to lower annuity payouts. You can shield yourself with an annuity ladder — buying an annuity every couple of years and staggering them over differing interest rates. This helps you snare higher interest rates as they rise.
Protection
Unlike savings accounts, annuities are not insured by the federal government. However, your payouts are protected by your state’s guaranty association. The amount that’s guaranteed varies from state to state. The National Organization of Life & Health Insurance Guaranty Associations can help you find out how protected your investment is. Also, research the financial stability and history of an insurer before buying your annuity.
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Understanding Annuity Rates

Fixed annuities generally offer a guaranteed static interest rate for a specific time period.

Current annuity rates can mirror bond interest rates. When bond rates increase, annuity rates also tend to rise.

That’s because insurance companies invest most of their client’s capital in fixed income securities, such as conservative bonds.

However, interest rates continue to fall. In 1982, for example, a 30-year Treasury bond yield was almost 15 percent. By October 2020, that yield had dropped to just 1.65 percent.

“Interest rates are at all-time lows and not likely to increase anytime soon,” said Mark Cavalieri, associate director of multiyear guaranteed annuity sales at Nebraska-based SMS Financial Solutions.

To combat this challenge, Cavalieri said top-rated insurance companies are focusing attention on a specific type of annuity.

“They’ve decided to go after more fixed annuity business during the [COVID-19] pandemic crisis,” he said. “Insurance companies are stimulating new business by offering higher rates on their multiyear guaranteed annuity products than they usually do.”

Now, the best fixed annuity rates yield more than either Treasury bonds or high-performing certificates of deposit, Cavalieri noted.

Surrender Periods and Annuity Rates

Most annuities feature a surrender period, a time during which you cannot withdraw funds from your account without facing a charge or fee.

Some annuity contracts are more flexible than others and may allow you to withdraw your money more easily. Others don’t allow any withdrawals during the surrender period.

Annuities with tight restrictions on withdrawals tend to pay higher rates.

The best annuity rates today may be different tomorrow. It’s important to check with insurance companies to confirm their specific rates.

Frequently Asked Questions About Annuity Rates

What is a good annuity rate?

If you are looking to buy an annuity, what counts as a good rate of growth each year can vary by the type you purchase and other factors. Current interest rates often play a role as well.

Who has the best annuity rates?

In 2021, some of the best rates belonged to annuity companies like Multi-Select, Guarantee Choice 100k+ and Bankers Elite. All three had rates between 1.95 and 3 percent.

What type of annuity has the best rates?

What counts as the best rate depends on the type of annuity you are looking for, how much risk or stability you prefer and other factors. Fixed annuities typically offer a guaranteed rate over a certain period of time.

Last Modified: December 6, 2022

19 Cited Research Articles

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