10-Year Fixed Annuity Rates

Current 10-Year Fixed Annuity Rates

Case Study: Buying a 10-Year Fixed Annuity

Ellen is about to enter retirement and, while happy with her savings, she is still looking for ways to grow her money and remain financially secure throughout her retirement.

This can be easier said than done given her risk aversion. She has major concerns about targeting any type of investment with a lot of risk involved, considering a recent retiree like herself is not in a position to risk losing money.

Ellen finds out about a product that checks virtually every box for her: a 10-year fixed annuity. It advertises a guaranteed interest rate of 5.5%, allowing her to grow her money at a solid pace without exposing herself to any real risk. She is also interested in the tax deferral features of the product.

Using $100,000 of her savings, Ellen purchases the annuity. 10 years later, when she turns 77, the annuity will be worth more than $170,000. 

10-Year Fixed Annuities vs. Other Term Products

The type of product that makes the most sense for you will depend on your goals and circumstances. Even different terms for fixed annuities will appeal to different people.

“An individual looking to take advantage of high, short-term interest rates may decide to fund a two-year, fixed interest only annuity,” Ken Orenstein, FRC, told Annuity.org. “Another individual structuring lifetime, guaranteed income may choose a 10-year product.”

Those lifetime payments are one major way a 10-year fixed annuity differs from other products. When you purchase your annuity, you can have the option to convert its value into guaranteed payments after your term is over.

This means you will receive set, monthly payments for the rest of your life, even if those payments eclipse the value of the annuity. Lifetime payments are an attractive feature for many retirees since they can effectively combat longevity risk.

10-year fixed-rate annuities are popular because their rates are high and guaranteed for the duration. I have many clients with what I term “lazy money”—funds they never intend to use and plan to leave behind for their families. Why not place these funds in a fixed annuity to benefit from guaranteed growth, tax deferral and leave them to a beneficiary without the risk and headache of market fluctuation instead.

Aamir M. Chalisa, MBA, LUTCF, MDRTGeneral Manager at Futurity First Insurance Group

Aamir M. Chalisa is the GM at Futurity First, leading Oak Brook’s top branch. With 30+ years’ expertise, chairs GAMA Global, driving diversity worldwide.

10-Year Fixed Annuity vs. CDs and Bonds

CDs and bonds operate differently than fixed annuities but can have appealing advantages. One place where annuities lag compared to CDs and bonds is liquidity. 

With annuities, you will likely face steep penalties if you attempt to withdraw more than 10% of the annuity’s value before your agreed-upon term has passed. Bonds and CDs simply withhold a few months’ interest as a penalty.

10-Year Fixed Annuity vs. Fixed Index Annuity

Another potential option for those interested in longer-term strategies is a fixed index annuity. These products provide the same guaranteed protection as a fixed annuity but leave more room for growth by tying it to the performance of an index.

In exchange for the protection of your principal, your growth is capped or set as just a portion of the index’s growth. For example, even if an index grows by 11%, your annuity may grow by 6%.

This avenue allows annuity buyers to participate in market gains more than they would with a fixed annuity while still being protected from downturns.

How We Get Our Rates Data

Annuity.org supplies fixed annuity rates through Cannex — an independent company that provides access to a database of updated annuity products.

We synchronize and update our rates information several times each week using the newest Cannex data to help ensure you have access to the most recent interest rates available.

Annuity.org features rates for fixed annuities from 1- to 10-year terms. In addition, we list the carrier that offers the rate and its respective AM Best financial strength rating.