The 5-year MYGA is the most popular fixed annuity term in America — and for good reason. It balances a competitive guaranteed rate with a reasonable lock-up period. Five years is short enough to plan around, long enough for the insurer to offer meaningfully higher rates than a savings account or short-term CD.
Below are today’s best 5-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
- 5-year MYGAs are the best-selling fixed annuity term — deep competition drives better rates
- Today’s top 5-year rates from A-rated carriers: approximately 4.75%–5.25%
- $100,000 at 5.00% for 5 years grows to $127,628 — guaranteed
- Most products allow 10% annual free withdrawals during the term
- Tax-deferred growth eliminates the annual tax drag that hurts CDs
What Is a 5-Year Fixed Annuity?
A 5-year fixed annuity — technically a 5-year MYGA — locks in your interest rate for 60 months. Unlike a traditional fixed annuity that resets rates annually, the MYGA rate is contractually guaranteed through the entire term.
Tom, age 63, invests $250,000 in a 5-year MYGA at 5.10%. At maturity, his account is worth $319,573 — guaranteed. He doesn’t need to watch interest rates, manage a bond portfolio, or worry about market volatility. The number is the number.
Who Should Choose a 5-Year Term?
The 5-year MYGA is the sweet spot for most pre-retirees and early retirees because the rate advantage over 3-year terms is typically 0.25%–0.75%, five years aligns well with typical retirement planning windows, and more carriers compete in the 5-year space than any other term, driving rates higher.
5-Year MYGA vs. 5-Year CD: The Math
| Product | Rate (Feb 2026) | $200K after 5 years | Notes |
|---|---|---|---|
| 5-Year MYGA (A-rated, top) | 5.25% | $258,199 | Tax-deferred growth |
| 5-Year MYGA (A-rated, avg) | 4.90% | $254,230 | Tax-deferred growth |
| 5-Year Bank CD (top rate) | 4.20% | $245,823 | Taxable each year |
| 5-Year Treasury Note | 4.10% | $244,491 | Taxable each year |
Over 5 years on $200,000, the top MYGA rate generates roughly $8,000–$12,000 more than the best available bank CD — before accounting for the tax-deferral advantage.
The Tax-Deferral Advantage
A bank CD forces you to report interest income each year, even if you don’t withdraw it. A MYGA does not — interest compounds tax-deferred until you take it out.
On a $200,000 investment at 5.00% for 5 years, someone in the 24% tax bracket pays roughly $4,800/year in taxes on CD interest — $24,000 over the term — that a MYGA owner defers entirely. For a full breakdown, see Tax-Deferred Growth: The Hidden Annuity Advantage.
What to Look for in a 5-Year MYGA
- AM Best rating: A- or better, always.
- Free withdrawal: Most allow 10% per year without penalty. Some carriers offer 15%.
- Surrender charges: Typical 5-year schedule: 5%–7% in year 1, declining 1% per year to zero at maturity.
- Nursing home waiver: Many quality products waive surrender charges if you enter a nursing facility.
- Death benefit: Most MYGAs pass full account value to beneficiaries without surrender charges. Confirm this.
- Simple vs. compound: Compound interest grows faster. Avoid simple interest (SI) products unless the rate premium is substantial.
What Happens After 5 Years?
At maturity, you’ll have a 30-day window to: withdraw your full balance (pay ordinary income tax on gains), roll into a new MYGA at current rates, do a 1035 exchange to another annuity product, or roll over within an IRA. Do not let the contract auto-renew without reviewing rates first — renewal rates are often lower than what you’ll find by shopping the market.
5-Year vs. 7-Year: When Is the Longer Term Worth It?
If the 7-year rate is 0.40%+ higher than the 5-year rate and you have no liquidity need in years 5–7, the longer term often wins. If the difference is only 0.10%–0.25%, the extra flexibility of the 5-year term is usually worth more than the marginal rate gain. See our best 7-year fixed annuity rates to compare side-by-side.
Frequently Asked Questions
What is the best 5-year annuity rate right now?
The best 5-year MYGA rates from A-rated carriers as of February 2026 range from approximately 4.75%–5.25%. See the live rate table above — rates are updated daily from AnnuityRateWatch.
How much does $100,000 grow in a 5-year annuity?
At 5.00%, $100,000 grows to $127,628 after 5 years. At 4.75%, it grows to $126,050. At 5.25%, it reaches $129,224. These are guaranteed, compound-interest figures — no market risk, no rate variability.
Can I lose money in a 5-year fixed annuity?
No, if you hold to maturity. Your principal is guaranteed by the insurance company and backed by state guaranty associations. If you surrender early, surrender charges could temporarily reduce your account value, though most products protect principal even during the surrender period through free-withdrawal provisions.
Is a 5-year MYGA a good investment for a 65-year-old?
For many retirees, yes. A 5-year MYGA can serve as the “safe money” portion of a retirement portfolio — earning a guaranteed 4.75%–5.25% while the rest stays invested in equities. It provides certainty without sacrificing all growth potential.
What is the minimum amount for a 5-year annuity?
Most 5-year MYGAs require $10,000–$25,000 minimum. Some carriers offer enhanced rates (0.10%–0.25% higher) for deposits of $100,000 or more.
Do 5-year annuities pay monthly income?
A MYGA accumulates interest during the term — it does not pay monthly income unless you elect systematic withdrawals using the free-withdrawal provision. At maturity, you can convert to an income annuity (SPIA) that pays guaranteed monthly income for life.
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.