2-Year Fixed Annuity Rates

Current 2-Year Fixed Annuity Rates

Case Study: Buying a 2-Year Fixed Annuity

Let’s look at an example of a person who may benefit from a 2-year fixed annuity. Susan is 63 years old and just a few years from retirement. She’s looking for ways to add a final boost to her nest egg.

Given how close she is to her golden years, she’s past the point of wanting to take a path that involves too much risk or could result in her losing her principal.

Susan is willing to put $100,000 toward this goal and is not worried about liquidity or the need to access that money any time soon. She also anticipates being in a lower tax bracket after retirement.

She finds a 2-year multi-year guaranteed annuity (MYGA) offering a guaranteed rate of 5.2%. This product offers everything she is looking for: a low-risk way to grow her money in the last couple of years leading up to retirement while also giving her tax advantages through its deferral feature.

2-Year Fixed Annuity vs. Other Term Products

If you are interested in a 2-year fixed annuity, compare your options with other common term products.

One of the primary benefits of a fixed annuity is the lack of risk involved, as well as the protection of your principal. If you are younger or have a larger appetite for risk, then traditional investing may be a path to consider as well.

Unlike CDs, Annuities can also protect your principle against liens and creditors. This is a great way to protect your assets without the use of a trust.

John Stevenson, CFFOwner and Advisor at Stevenson Retirement Solutions

John Stevenson, a Certified Financial Fiduciary®️, specializes in securing retirements with tax-free accounts. With a focus on guaranteed retirement, he’s ensured none of his clients suffer from market fluctuations. As a renowned educator and podcast host, John empowers thousands weekly, sharing his expertise in minimizing taxes and protecting against financial downturns.

2-Year Fixed Annuity vs. 2-Year CD

One similar product to a short-term fixed annuity is a certificate of deposit. CDs operate similarly in that they involve handing over money in exchange for a guaranteed rate of return over a set period.

CDs are illiquid, and your money typically cannot be accessed during the term. While annuities are mostly illiquid as well, some fixed annuities actually may offer more liquidity in case you face an emergency such as terminal illness or confinement to nursing care. These products allow you to withdraw a certain amount of your principal without facing a penalty.

Another key difference is that CDs are generally not tax-deferred unless they are held within a 401(k) or similar retirement account.

When deciding between an annuity or CD, consider several key factors, including:

• What rates are available for each option? A higher rate means more money.
• How important are the annuity’s tax deferral features to your financial plan?
• Does the annuity have liquidity features allowing you to access some money without penalty?
• Is the annuity providers you are considering in good financial standing?

Depending on your goals and needs, both options may make sense in different situations. CDs can make sense for those looking for a straightforward investment with few bells and whistles while annuities can be a strong choice for those who can benefit from tax deferral or are ready to take advantage of the highest rate available.

How We Get Our Rates Data

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

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

Annuity.org features regularly updated rates for fixed annuities from one- to 10-year terms. We also state the carrier that is offering the rate, along with that company’s AM Best financial strength rating.