What's a good annuity rate in 2026?
No matter how well you prepare, the retirement planning process comes with lots of unknowns, from how long your savings need to last to what your investment returns may look like from one year to the next. That uncertainty can make retirement products with guaranteed returns, like annuities, particularly appealing, especially for retirees and those approaching retirement who want to ensure that they have a source of predictable income in their financial plan.
And right now, the interest rate environment is giving annuity shoppers even more to consider. After all, longer-term yields remain elevated, despite the ongoing questions about where rates could be headed next. That broader rate environment has also helped keep yields on certain fixed-income products relatively high compared with the ultra-low-rate environment of several years ago.
But simply finding an annuity advertising a high percentage doesn't necessarily mean you've found a good deal. Annuity rates vary substantially by product, term, insurer and contract provisions, and the highest advertised rate may come with tradeoffs that matter just as much as the return itself. So, what should annuity buyers consider a good rate in 2026?
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What's a good annuity rate in 2026?
There's no single annuity rate that qualifies as "good" for every buyer, in part because annuities come in several forms and rates aren't expressed the same way across all of them. But if you're shopping for a fixed annuity or multi-year guaranteed annuity (MYGA), current market rates provide a useful benchmark.
As of early September, the highest MYGA rates tracked by Annuity.com, using CANNEX data, range from 5.25% to 6.30% for terms of two to 10 years, with the exception of 9-year annuity products, which topped out at 5.40%. The highest 5-year rate is 6.30% currently, while the highest 3-year annuity rates are sitting at 6.00% and the highest 10-year rates are at 6.25%.
That means in general, a fixed annuity rate in the mid-5% range or higher can be considered competitive in today's market, while rates around 6% or higher are available among some of the leading offers. However, those figures should be viewed as benchmarks rather than hard rules. Annuity rates can change frequently, and available offers can depend on factors including your state, deposit amount, insurer and guarantee period.
It's also important to make the right comparisons while weighing your annuity options. A 6% rate that's guaranteed for three years isn't necessarily better than a slightly lower rate that's guaranteed for five years, for example. After all, if market rates fall before the shorter contract ends, you could have to reinvest at a lower rate. Conversely, locking your money into a longer contract could be less appealing if rates rise.
And the comparison process becomes more complicated with other types of annuities. Fixed indexed annuities, for example, typically use participation rates, caps or spreads to determine how much interest is credited based on an index's performance. Immediate annuities, meanwhile, are generally evaluated by the income they produce rather than a simple annual interest rate. As a result, what counts as a good rate needs to be evaluated within the specific annuity category you're considering.
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What else should you consider when comparing annuity rates?
The annuity interest rate can tell you how quickly your money may grow, but it doesn't tell you whether an annuity is a good fit for your retirement plan. Before choosing a contract based on its advertised return, consider these factors as well:
The insurer's financial strength: Annuities are not FDIC-insured, and their guarantees depend on the financial strength and claims-paying ability of the insurer that issues them. That makes the insurer's financial strength an important part of the comparison rather than focusing exclusively on which company advertises the highest rate.
The surrender period: MYGAs guarantee a fixed rate for a set period, commonly spanning multiple years, but they are designed as long-term retirement products. Accessing too much of your money during the surrender period can result in charges, depending on the contract.
Withdrawal provisions: Liquidity rules vary between contracts. Some MYGAs allow penalty-free access to interest or a portion of the contract's value each year, while the specific limits and conditions depend on the product.
The guarantee period: Don't assume a longer term automatically produces a better return. Current rates don't rise neatly with contract length. For example, the highest 5-year MYGA yield tracked by Annuity.com was 6.30%, compared with 6.25% for 7- and 10-year terms.
Your broader retirement needs: An annuity can provide guaranteed growth or income, but putting too much money into one could reduce your financial flexibility. You'll still want accessible funds for emergencies and unexpected expenses, along with investments that offer growth potential if your retirement could last decades.
The bottom line
A good annuity rate in 2026 isn't simply the highest percentage you can find. For fixed annuities and MYGAs, rates in the mid-5% range or higher are competitive in today's market, with some leading offers currently reaching 6% or more. But the rate should be weighed against the insurer's financial strength, surrender schedule, withdrawal rules and guarantee period.
That's also why comparison shopping can make a meaningful difference. Rates and contract terms can vary between insurers, even for annuities with similar terms. Getting several quotes — and comparing the details behind those rates — can help you determine which option offers the right balance of return, guarantees and flexibility for your retirement plan.
