A 3-year fixed annuity — also called a 3-year MYGA — guarantees your interest rate for exactly 36 months. No market risk, no rate resets, no surprises. What you see when you apply is what you earn through maturity.
Below are today’s best 3-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
- 3-year MYGAs offer full rate certainty for 36 months — ideal for short-term savers
- Only A-rated carriers (AM Best) shown — financial safety comes first
- Most products allow 10% free withdrawals annually without penalty
- Interest compounds annually and grows tax-deferred until withdrawal
- Compare with 5-year rates — sometimes the yield difference is minimal
What Is a 3-Year Fixed Annuity?
A 3-year fixed annuity is a multi-year guaranteed annuity (MYGA) with a 36-month rate guarantee. You deposit a lump sum — typically $10,000 minimum — and the insurance company pays you a fixed interest rate every year until the term ends. At maturity, you can withdraw your money, roll into a new annuity, or convert to income.
The mechanics are simple: invest $100,000 at 4.75% for 3 years, and your account grows to $114,925 at maturity — guaranteed, regardless of what interest rates, the stock market, or the economy do during that period.
Who Should Choose a 3-Year Term?
A 3-year MYGA makes the most sense for savers who have a specific near-term goal (college funding, a planned retirement date, a home purchase), want flexibility sooner, believe rates may rise and want to reinvest after 3 years, or are bridging to Social Security with a defined gap to fill.
If you don’t have a near-term need, compare the 3-year rate against 5-year MYGA rates. Often the extra yield on a 5-year term is worth the additional lock-up period.
3-Year Annuity vs. 3-Year CD: Which Pays More?
In most market environments, 3-year MYGAs from A-rated insurers pay more than 3-year bank CDs. The gap is typically 0.25%–0.75%. Insurance companies invest in higher-yielding corporate bonds, while banks hold more conservative assets.
| Product | Typical 3-Yr Rate (Feb 2026) | $100K after 3 years | Backing |
|---|---|---|---|
| 3-Year MYGA (A-rated) | 4.40%–5.00% | $113,800–$115,763 | State guaranty assoc. |
| 3-Year Bank CD (top rate) | 3.80%–4.30% | $111,882–$113,390 | 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 MYGAs allow 10% penalty-free withdrawals per year. Know your liquidity needs before locking in.
- Surrender charge schedule: Typical 3-year products charge 3%–5% in year 1, declining to 0% at maturity.
- AM Best rating: Only consider A-, A, A+, or A++ rated carriers.
- Minimum premium: Most top-rate products require $10,000–$20,000 minimum.
- Simple vs. compound interest: Compound interest is preferable — it earns interest on interest each year. Look for “SI” notation to identify simple interest products.
How Are 3-Year Annuity Rates Taxed?
Interest earned inside a non-qualified (after-tax) MYGA grows tax-deferred — you owe no taxes until you withdraw. At withdrawal, earnings are taxed as ordinary income. If you withdraw before age 59.5, a 10% IRS early withdrawal penalty typically applies in addition to income tax.
For a full breakdown, see How Are Annuities Taxed?
How to Buy a 3-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 20+ carriers
- Submit your application — most take 15–30 minutes
- Use the free-look period (10–30 days) to confirm your decision
Frequently Asked Questions
What is the best 3-year annuity rate available today?
The best 3-year MYGA rates from A-rated carriers as of February 2026 range from approximately 4.40%–5.00%. Rates change daily — see the live table above for current figures sourced from AnnuityRateWatch.
Is a 3-year annuity better than a 3-year CD?
In most market environments, 3-year MYGAs from A-rated carriers pay 0.25%–0.75% more than equivalent bank CDs. The trade-off: MYGAs are backed by state guaranty associations rather than FDIC insurance. If your balance is within FDIC limits, a CD may be preferable for some savers despite the lower rate.
Can I withdraw money from a 3-year annuity early?
Most 3-year MYGAs allow 10% of your account value annually without surrender charges. Amounts above that face a declining surrender charge — typically 3%–5% in year 1, reaching zero at maturity. IRS early withdrawal penalties (10%) may also apply if you’re under 59.5.
What happens at the end of a 3-year annuity term?
At maturity, most carriers give you a 30-day window to withdraw your full balance without penalty, roll into a new annuity at current rates, or convert to an income stream. If you do nothing, many contracts auto-renew at a declared renewal rate, which may be lower than your original rate.
Are 3-year annuity rates guaranteed?
Yes — on a MYGA. The rate is contractually guaranteed for the full 36-month term and cannot be reduced during that period. This is the fundamental difference between a MYGA and a traditional fixed annuity, which may reset rates annually.
What is the minimum investment for a 3-year annuity?
Most 3-year MYGAs require $5,000–$25,000 minimum premium. Products offering the highest rates typically require $10,000–$20,000. Some carriers have enhanced rates for investments of $100,000 or more.
Pros and Cons of Fixed Annuities
Before you commit to a fixed annuity, weigh the advantages and drawbacks for your retirement situation.
- ✓ Guaranteed rate locked in for the full term — no surprises
- ✓ Principal is 100% protected from market losses
- ✓ Often pays significantly more than CDs or savings accounts
- ✓ Tax-deferred growth — no annual tax bill until withdrawal
- ✓ Up to 10% annual free withdrawal without surrender charge
- ✓ State guaranty association coverage (typically up to $250,000)
- ✓ Simple to understand — no moving parts or index tracking
- ✗ Surrender charges apply if you withdraw more than 10% early
- ✗ Not FDIC insured — backed by the insurance company, not the government
- ✗ Earnings taxed as ordinary income (not capital gains rates)
- ✗ 10% IRS early-withdrawal penalty before age 59½
- ✗ Rate is fixed — you won't benefit if market rates rise
- ✗ Less liquidity than a savings account or money market
Learn more: Are annuities safe?
Compare Top MYGA Rates by Term
See today's highest guaranteed rate from an A-rated carrier for each term length.
Types of Annuities
Insurance companies offer several types of annuities to fit different financial goals. Here's how they compare.
A MYGA (Multi-Year Guaranteed Annuity) is the simplest fixed annuity. Your rate is guaranteed for the entire term — 3, 5, or 7 years. No market exposure, no index tracking. What you see is what you earn.
Best for: Savers who want a predictable, guaranteed return and are comfortable locking funds for a set term. Often compared to CDs but frequently pays more.
Current top 5-year rate: 6.30% APY
Learn more about MYGAs →A Fixed Indexed Annuity (FIA) links your interest credits to a market index (like the S&P 500) with a floor of 0% — so you can never lose principal. Upside is capped via participation rates or caps.
Best for: Investors who want some market participation with a safety net. More complex than MYGAs but potentially higher returns in strong market years.
Learn more about FIAs →A SPIA (Single Premium Immediate Annuity) converts a lump sum into a guaranteed income stream — monthly checks that start within 30 days and continue for life or a set period.
Best for: Retirees who need guaranteed income immediately and want to eliminate the risk of outliving their money. The "pension replacement" product.
Learn more about SPIAs →A Variable Annuity invests your premium in sub-accounts (similar to mutual funds). Returns fluctuate with the market — you can earn more but can also lose principal.
Best for: Long-term investors who want market exposure inside a tax-deferred wrapper and are comfortable with investment risk. Higher fees than fixed products.
Learn more about variable annuities →A RILA (Registered Index-Linked Annuity) offers partial market participation with a defined buffer against losses (e.g., 10% or 20%). Unlike FIAs, RILAs can lose money — but losses are limited.
Best for: Investors willing to accept limited downside in exchange for higher upside potential than a traditional FIA. A middle ground between fixed and variable.
Learn more about RILAs →Rate Methodology
AnnuityJournal monitors MYGA rates from over 50 A-rated insurance carriers via AnnuityRateWatch. Our rate data refreshes every 6 hours.
To make our list, a carrier must be rated A− or better by AM Best — a financial strength rating that indicates the insurer's ability to meet obligations. Carriers with ratings of B++ or lower are excluded regardless of how attractive their rate appears.
Rates are sorted by highest guaranteed APY within each term group. Products using simple interest (SI) are labeled — the effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) purchases.