Best Annuity Rates in Arkansas (2026)

Arkansas has aggressively cut its income tax rate in recent years — the top rate has dropped from 5.9% to 4.4% with further reductions scheduled — and the state fully exempts Social Security from income tax. Bentonville, Fayetteville, Hot Springs, and Little Rock attract retirees who appreciate the Ozarks scenery and a tax trajectory that keeps getting better. Understanding how annuities work is a good starting point before comparing today’s rates.

Below are today’s best MYGA rates available to Arkansas residents, filtered to A-rated carriers only, updated daily.

Are Fixed Annuities a Good Investment in Arkansas?

Arkansas’s rapidly declining tax rate makes deferral especially timely. Income you defer inside a MYGA today at 4.4% may be taxed at 3.9% or lower when you eventually withdraw — a built-in rate improvement on top of the standard tax deferral benefit. At the current 4.4% rate, the annual tax on $10,000 of annuity interest is $440. Over a 5-year MYGA on $200,000 at 5.00%, the cumulative deferred Arkansas state tax on $50,000 of interest is approximately $2,200 — money that stays compounding inside the contract.

Here is a concrete example: Betty, age 64, lives in Fayetteville with $175,000 to protect. She places it in a 5-year MYGA at 5.00%. Her account grows to approximately $223,387 — a $48,387 gain. During the five accumulation years, she owed zero Arkansas income tax on the growth. If she had used a taxable CD at the same rate, she would have paid approximately $440 per year in Arkansas taxes on the interest — roughly $2,200 total over five years. The MYGA deferred all of that, plus any reduction in the Arkansas rate over that same period is pure bonus.

Arkansas Guaranty Association: How Your Annuity Is Protected

The Arkansas Life and Health Insurance Guaranty Association (ARLHIGA) protects Arkansas policyholders if a licensed insurer becomes insolvent. At $300,000, Arkansas’s annuity coverage is above the national $250,000 standard. Coverage is automatic — no enrollment required.

For annuity portfolios over $300,000, split across two or more A-rated carriers to keep each position within coverage limits.

Arkansas Life and Health Insurance Guaranty Association
Website: arlifega.org

How Arkansas Taxes Annuity Income

Arkansas taxes annuity income as ordinary income at graduated rates with a top rate of 4.4%. Social Security is fully exempt at all income levels. Arkansas has been reducing its top rate each year and further reductions are scheduled. The declining rate trajectory means income deferred today in a MYGA may be taxed at a lower rate upon withdrawal.

Arkansas has no state estate tax and no inheritance tax. Annuity death benefits paid to named beneficiaries bypass probate and pass free of Arkansas estate-level taxation.

Arkansas Insurance Department

The Arkansas Insurance Department (AID) licenses and regulates all insurance carriers and agents operating in Arkansas. Verify both the carrier and your agent before purchasing an annuity.

Tips for Buying an Annuity in Arkansas

• Defer now, benefit from lower rates later: Arkansas’s top income tax rate has fallen from 5.9% to 4.4% in just a few years and further cuts are scheduled. Income you defer inside a MYGA today may be taxed at a lower Arkansas rate when you withdraw — effectively doubling the tax benefit of deferral.
• Social Security is fully exempt: Arkansas does not tax Social Security benefits at any income level. Combined with the declining income tax rate, Arkansas retirees drawing Social Security plus modest annuity income face one of the lower effective retirement tax burdens in the South.
• $300,000 guaranty limit gives extra room: Arkansas’s above-average coverage means you can hold slightly more with a single A-rated carrier. Still split above $300,000.
• No estate tax keeps wealth transfer clean: No estate or inheritance tax in Arkansas. Name beneficiaries on annuity contracts to bypass probate entirely.
• Work with an independent broker: Northwest Arkansas (Fayetteville/Bentonville) has become a major retirement destination with an active independent broker market. Independent brokers compare 20+ carriers for your best rate.
• Use the free-look period: Arkansas requires at least 10 days to review and cancel any annuity contract for a full premium refund.