Key Takeaways
- South Dakota has no state income tax, 100% of your annuity growth stays in your pocket at the state level
- The South Dakota Life and Health Insurance Guaranty Association protects annuity cash values up to $250,000 per insurer
- South Dakota is one of the most retirement-friendly states in the country, with no tax on wages, pensions, Social Security, or annuity withdrawals
- Only carriers rated A- or better are shown in the rate table below, all regulated by the South Dakota Division of Insurance
South Dakota stands out as one of the most tax-friendly states in the nation for retirees. With no state income tax of any kind, annuity withdrawals are never subject to state-level taxation, making South Dakota a natural fit for anyone who wants to maximize after-tax retirement income. Combine that with competitive MYGA rates from carriers rated A- or better and you have a strong case for building your guaranteed income floor here.
2-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oceanview Life and Annuity | Harbourview 2 | 5.15%Top Rate | 2 yr | $70,000 | 10% | |
| Oceanview Life and Annuity | Harbourview 2 (CA) | 5.15% | 2 yr | $70,000 | 10% | |
| Axonic Insurance | Waypoint 2 MYGA | 5.10% | 2 yr | $100,000 | 10% | |
| GBU Life | Asset Guard Select 2 | 5.05% | 2 yr | $25,000 | 10% | |
| Aspida | Synergy Choice 2 | 4.80% | 2 yr | $100,000 | 0% | |
| Mass Mutual | Premier Voyage 2 | 4.70% | 2 yr | $1,000,000 | 10% | |
| Americo | Platinum Assure 2 | 4.15% | 2 yr | $25,000 | 3% |
3-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Ibexis | MYGA Plus 3 (Simple Interest) SI | 6.15%Top Rate | 3 yr | $100,000 | 10% | |
| Ibexis | MYGA Plus 3 (Simple Interest) CA SI | 6.05% | 3 yr | $100,000 | 10% | |
| American National Insurance Company | Palladium MYG MAX 3 | 5.90% | 3 yr | $250,000 | 0% | |
| Knighthead Life | Staysail 3 (Simple Interest) SI | 5.85% | 3 yr | $100,000 | 0% | |
| Knighthead Life | Staysail 3 CA (Simple Interest) SI | 5.85% | 3 yr | $100,000 | 0% | |
| American National Insurance Company | Palladium MYG Annuity 3 | 5.75% | 3 yr | $250,000 | 10% | |
| Athene IA | Athene Max Rate 3 | 5.75% | 3 yr | $100,000 | Interest Only | |
| Athene IA | Athene Max Rate 3 (state specific) | 5.75% | 3 yr | $100,000 | Interest Only |
4-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oxford Life Insurance Company | Multi-Select 4 | 5.75%Top Rate | 4 yr | $20,000 | 10% | |
| Americo | Platinum Assure 4 | 5.70% | 4 yr | $25,000 | 5% | |
| Oceanview Life and Annuity | Harbourview 4 | 5.70% | 4 yr | $70,000 | 10% | |
| Oceanview Life and Annuity | Harbourview 4 (CA) | 5.70% | 4 yr | $70,000 | 10% | |
| Clear Spring Life | Preserve MYGA 4 | 5.60% | 4 yr | $100,000 | 10% | |
| Mass Mutual | Premier Voyage 4 | 5.55% | 4 yr | $1,000,000 | 10% | |
| Guardian Insurance & Annuity Co. | Guardian Fixed Target Annuity 4 | 5.50% | 4 yr | $100,000 | 10% | |
| Nationwide Life Insurance Company | Secure Growth 4 MVA | 5.50% | 4 yr | $100,000 | 10% |
5-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Knighthead Life | Staysail 5 (Simple Interest) SI | 6.65%Top Rate | 5 yr | $100,000 | 0% | |
| Knighthead Life | Staysail 5 CA (Simple Interest) SI | 6.65% | 5 yr | $100,000 | 0% | |
| Ibexis | MYGA Plus 5 (Simple Interest) SI | 6.60% | 5 yr | $100,000 | 10% | |
| Ibexis | MYGA Plus 5 (Simple Interest) CA SI | 6.50% | 5 yr | $100,000 | 10% | |
| Aspida | Synergy Choice 5 | 6.30% | 5 yr | $100,000 | 0% | |
| Axonic Insurance | Waypoint 5 MYGA | 6.10% | 5 yr | $100,000 | 10% | |
| Athene IA | Athene Max Rate 5 | 6.05% | 5 yr | $100,000 | Interest Only | |
| Athene IA | Athene Max Rate 5 (state specific) | 6.00% | 5 yr | $100,000 | Interest Only |
6-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oceanview Life and Annuity | Harbourview 6 | 6.10%Top Rate | 6 yr | $70,000 | 10% | |
| Oceanview Life and Annuity | Harbourview 6 (CA) | 5.95% | 6 yr | $70,000 | 10% | |
| Oxford Life Insurance Company | Multi-Select 6 | 5.95% | 6 yr | $20,000 | 10% | |
| Americo | Platinum Assure 6 | 5.90% | 6 yr | $25,000 | 5% | |
| Guardian Insurance & Annuity Co. | Guardian Fixed Target Annuity 6 | 5.80% | 6 yr | $100,000 | 10% | |
| Mass Mutual | Premier Voyage 6 | 5.75% | 6 yr | $1,000,000 | 10% | |
| Clear Spring Life | Preserve MYGA 6 | 5.70% | 6 yr | $100,000 | 10% | |
| American General Life Insurance Company | American Pathway VisionMYG 6 | 5.40% | 6 yr | $100,000 | 15% |
7-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Knighthead Life | Staysail 7 (Simple Interest) SI | 7.10%Top Rate | 7 yr | $100,000 | 0% | |
| Knighthead Life | Staysail 7 CA (Simple Interest) SI | 7.10% | 7 yr | $100,000 | 0% | |
| Ibexis | MYGA Plus 7 (Simple Interest) SI | 6.85% | 7 yr | $100,000 | 10% | |
| Ibexis | MYGA Plus 7 (Simple Interest) CA SI | 6.75% | 7 yr | $100,000 | 10% | |
| Aspida | Synergy Choice 7 | 6.35% | 7 yr | $100,000 | 0% | |
| Athene IA | Athene Max Rate 7 | 6.15% | 7 yr | $100,000 | Interest Only | |
| Athene IA | Athene Max Rate 7 (state specific) | 6.10% | 7 yr | $100,000 | Interest Only | |
| Knighthead Life | Staysail 7 CA with Liquidity (Simple Interest) SI | 6.05% | 7 yr | $100,000 | 10% |
8-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oxford Life Insurance Company | Multi-Select 8 | 5.90%Top Rate | 8 yr | $20,000 | 10% | |
| Clear Spring Life | Preserve MYGA 8 | 5.70% | 8 yr | $100,000 | 10% | |
| Pacific Guardian Life | Diamond Head 8 | 5.40% | 8 yr | $10,000 | 10% | |
| American National Insurance Company | Palladium MYG Annuity 8 | 5.30% | 8 yr | $250,000 | 10% | |
| Guaranty Income Life | Guaranty Rate Lock 8 | 3.90% | 8 yr | $250,000 | 5% |
9-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oxford Life Insurance Company | Multi-Select 9 | 5.95%Top Rate | 9 yr | $20,000 | 10% | |
| Capitol Life Insurance Company | Heritage Elite 9 | 5.75% | 9 yr | $10,000 | 0% | |
| Liberty Bankers Life | Heritage Elite 9 | 5.75% | 9 yr | $10,000 | 0% | |
| Capitol Life Insurance Company | Heritage Premier 9 | 5.70% | 9 yr | $10,000 | Interest Only | |
| Clear Spring Life | Preserve MYGA 9 | 5.70% | 9 yr | $100,000 | 10% | |
| Liberty Bankers Life | Heritage Premier 9 | 5.70% | 9 yr | $10,000 | Interest Only | |
| Capitol Life Insurance Company | Heritage Classic 9 | 5.65% | 9 yr | $10,000 | 10% | |
| Liberty Bankers Life | Heritage Classic 9 | 5.65% | 9 yr | $10,000 | 10% |
10-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oceanview Life and Annuity | Harbourview 10 | 6.20%Top Rate | 10 yr | $70,000 | 10% | |
| Oceanview Life and Annuity | Harbourview 10 (CA) | 6.05% | 10 yr | $70,000 | 10% | |
| Lincoln Financial | Lincoln MYGuarantee Plus 10 | 6.00% | 10 yr | $100,000 | 10% | |
| Oxford Life Insurance Company | Multi-Select 10 | 5.95% | 10 yr | $20,000 | 10% | |
| Reliance Standard Life | Reliance Guarantee - 10 | 5.90% | 10 yr | $20,000 | 10% | |
| Delaware Life | Pinnacle Plus MYGA 10 | 5.85% | 10 yr | $100,000 | 10% | |
| Royal Neighbors of America | MYGA 10 Year | 5.80% | 10 yr | $100,000 | Interest Only | |
| American General Life Insurance Company | American Pathway VisionMYG 10 | 5.75% | 10 yr | $100,000 | 15% |
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 — the 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 broker before purchasing.
How South Dakota Taxes Annuity Income
South Dakota does not levy a state income tax. There is no tax on wages, investment income, pension distributions, Social Security benefits, or annuity withdrawals. This has been a permanent feature of South Dakota’s tax structure, not a temporary exemption, making it one of only nine states nationwide without a state income tax as of 2026.
For annuity owners, this means the only taxes owed on withdrawals are at the federal level. For qualified annuities held inside an IRA or 401(k), federal ordinary income tax applies to the full withdrawal. For non-qualified annuities, only the earnings portion is federally taxable, your original principal comes back tax-free. Either way, there is no South Dakota state tax bill to plan around.
The federal 10% early withdrawal penalty still applies to distributions taken before age 59½, regardless of South Dakota’s tax-free status. But the absence of state income tax meaningfully improves the after-tax math on every dollar you withdraw in retirement.
South Dakota Guaranty Association Coverage
The South Dakota Life and Health Insurance Guaranty Association (SDLHIGA) protects annuity policyholders if a licensed insurance carrier becomes insolvent. Coverage is $250,000 per insurer per policyholder for annuity cash values. This protection is automatic for all annuities issued by South Dakota-licensed carriers, no registration or application required.
As with all state guaranty associations, this protection is a backstop, not a substitute for carrier quality. That is why the rate table above shows only carriers rated A- or better (A-, A, A+, or A++ from AM Best). Choosing a financially strong insurer reduces the chance you ever need to rely on guaranty association coverage.
Best Annuity Strategies for South Dakota Residents
Because South Dakota has no state income tax, many of the tax-timing strategies used by residents in high-tax states are simply unnecessary here. You do not need to carefully manage annuity withdrawals to avoid bumping into a state tax bracket, and there is no interaction between annuity income and state Social Security taxation.
That said, federal tax planning still matters significantly. For South Dakota retirees with large traditional IRA balances, a MYGA held inside the IRA locks in a guaranteed rate while deferring federal income tax until withdrawal. Roth conversions are also worth considering for residents with lower income years, converting traditional IRA funds to Roth while income is low means future Roth distributions come out completely tax-free at both federal and state levels.
South Dakota is also notably favorable for annuity trust and estate planning. The state has no estate or inheritance tax, and its strong trust laws have made it a popular domicile for holding long-term assets. Residents with substantial assets should explore how annuities can work alongside South Dakota’s trust statutes to maximize wealth transfer efficiency.
Frequently Asked Questions
Are annuities taxable in South Dakota?
Not at the state level. South Dakota has no state income tax, so annuity withdrawals are never subject to state taxation. Federal income taxes still apply, the full withdrawal is taxable for qualified annuities, and only the earnings portion is taxable for non-qualified annuities.
What is the South Dakota annuity guaranty limit?
The South Dakota Life and Health Insurance Guaranty Association covers annuity cash values up to $250,000 per insurer per policyholder. This protection is automatic for annuities issued by South Dakota-licensed carriers.
What are today’s best MYGA rates available in South Dakota?
The rate table above shows current MYGA rates from carriers rated A- or better available in South Dakota, updated daily. Because South Dakota residents owe no state income tax, the after-tax yield on these rates is higher here than in most other states.
Is Social Security taxed in South Dakota?
No. South Dakota does not tax Social Security benefits, or any other type of income, at the state level. Only federal income tax applies to Social Security benefits, using the standard federal rules based on your combined income.
