A 2-year fixed annuity — also called a 2-year MYGA — locks in a guaranteed interest rate for exactly 24 months. No market risk, no rate resets, no surprises. For savers who want a short commitment with a guaranteed return that beats most bank products, the 2-year term is often the right fit.
Below are today’s best 2-year fixed annuity rates from A-rated carriers, updated daily.
Rates shown are for informational purposes only and subject to change without notice. Only carriers rated A− or better by AM Best are included. Products marked SI use simple interest — effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) funds. Always verify current rates with a licensed annuity professional before purchasing.
Key Takeaways
- 2-year MYGAs offer full rate certainty for 24 months — the shortest fixed annuity commitment available from most carriers
- Only A-rated carriers (AM Best) shown — financial safety comes first
- Most products allow 10% free withdrawals annually without penalty after year one
- Interest grows tax-deferred until withdrawal
- Compare with 3-year rates — the yield difference is often minimal for one extra year of commitment
What Is a 2-Year Fixed Annuity?
A 2-year fixed annuity is a multi-year guaranteed annuity (MYGA) with a 24-month rate guarantee. You deposit a lump sum — typically $10,000 minimum — and the insurance company credits a fixed interest rate annually until the term ends. At maturity, you can withdraw your full balance, roll it into a new annuity, or convert to lifetime income with no surrender charges.
The mechanics are simple: invest $100,000 at 4.60% for 2 years and your account grows to $109,412 at maturity — guaranteed, regardless of what happens to interest rates or the economy during that period.
Who Should Choose a 2-Year Term?
A 2-year MYGA is the right choice when you:
- Believe interest rates may continue to rise and want to reinvest sooner
- Have a specific need for funds in approximately 2 years (a planned expense, a home renovation, a business purchase)
- Are bridging a short income gap and want guaranteed returns without long-term lock-up
- Are testing a new carrier before committing to a longer term
- Want CD-like simplicity and safety with a better rate than most banks offer
If you don’t have a specific 2-year horizon, compare the rate against a 3-year MYGA. The additional year often adds only 0.10%–0.30%, which may or may not be worth the extra commitment depending on your situation.
2-Year Annuity vs. 2-Year CD: What Pays More?
In most market environments, 2-year MYGAs from A-rated insurers outperform 2-year bank CDs. The spread is typically 0.25%–0.75%, driven by the fact that insurance companies can invest in higher-yielding corporate bonds, while banks hold more conservative assets.
| Product | Typical 2-Yr Rate (March 2026) | $100K after 2 years | Backing |
|---|---|---|---|
| 2-Year MYGA (A-rated) | 4.30%–4.90% | $108,784–$109,999 | State guaranty assoc. |
| 2-Year Bank CD (top rate) | 3.70%–4.30% | $107,529–$108,784 | FDIC up to $250K |
| High-yield savings | 3.50%–4.50% | Variable (rate not fixed) | FDIC up to $250K |
What to Look for Beyond the Interest Rate
- Free withdrawal provision: Most 2-year MYGAs allow 10% penalty-free withdrawals per year after year one. If you may need access to funds within 24 months, confirm this provision before purchasing.
- Surrender charge schedule: 2-year products typically carry a 2%–4% charge in year 1 only. Year 2 is often charge-free or carries a minimal charge.
- AM Best rating: Only consider A-, A, A+, or A++ rated carriers.
- MVA provision: Some short-term MYGAs include a market value adjustment. Look for products that explicitly state “no MVA” if this is a concern.
- Minimum premium: Most top-rate 2-year products require $10,000–$25,000 minimum.
How 2-Year Annuity Rates Are Taxed
Interest earned inside a non-qualified (after-tax) 2-year MYGA grows tax-deferred — no taxes are owed until you withdraw. At withdrawal, earnings are taxed as ordinary income. For a qualified MYGA inside an IRA, RMD rules may require minimum annual distributions once you reach age 73.
For a complete breakdown, see our guide to how annuities are taxed.
What Happens at Maturity?
At the end of your 2-year term, your annuity enters a free window — typically 30 days — during which you can:
- Withdraw the full balance — no surrender charges, no penalties from the carrier
- Renew with the same carrier — at whatever rate they declare for the new term
- 1035 exchange to a new carrier — lock in a better rate elsewhere without triggering immediate taxes
- Annuitize — convert to lifetime income payments
If you miss the free window and do nothing, most contracts auto-renew at the carrier’s current declared rate — which may be lower than what you originally earned. Set a reminder 60 days before your maturity date. Learn how renewal and exchange decisions work in our 1035 exchange guide.
How to Buy a 2-Year Fixed Annuity
- Compare rates using the live table above
- Verify the product is available in your state
- Confirm the carrier rating is A- or better from AM Best
- Work with an independent broker who has access to multiple carriers
- Submit your application — most take 15–30 minutes to complete
Frequently Asked Questions
Are 2-year annuity rates competitive with CDs?
In most environments, yes. 2-year MYGAs from A-rated carriers typically outperform 2-year bank CDs by 0.25%–0.75%. The primary difference is that MYGA interest is not FDIC insured — it is backed by the insurance carrier and state guaranty associations (up to $250,000 in most states).
Can I lose money in a 2-year fixed annuity?
You cannot lose money due to market performance — your principal and interest rate are contractually guaranteed. You can reduce your net return if you surrender early and pay surrender charges, or if you make withdrawals exceeding the free withdrawal provision.
Is a 2-year or 3-year annuity better?
It depends on your situation. If the 3-year rate is meaningfully higher (0.40%+) and you don’t have a specific need for funds in 2 years, the 3-year term often makes more sense. If rates are similar and you value flexibility sooner, the 2-year term is the better choice.
Sources & Citations
- AnnuityRateWatch, AnnuityRateWatch Rate Database – live MYGA rate data powering the comparison table above, updated daily from A-rated carriers
- FDIC, FDIC National Rates and Rate Caps – national average CD rates used for comparison data
- NAIC, Buyer’s Guide for Fixed Deferred Annuities – surrender charge and free withdrawal disclosures required in annuity contracts