Do fixed annuities pay more than CDs in 2026?

Generally yes. As of mid-2026, top fixed annuity rates from highly rated carriers run roughly 5% to 5.75%, while the best 5-year bank CDs pay around 4.2% to 4.65%. Over the last two years, MYGAs have typically paid 1% to 1.75% more than comparable CDs, and annuity interest grows tax-deferred while CD interest is taxed every year.

Should I choose a fixed annuity or an indexed annuity inside my Roth IRA?

Inside a Roth, tax deferral is redundant because the Roth is already tax-free, so the choice comes down to guarantee versus upside. A fixed annuity (MYGA) locks a known rate, around 5% to 5.75% from strong carriers in mid-2026. A fixed indexed annuity offers market-linked upside with a 0% floor, but adds caps, longer surrender periods, and complexity. Certainty favors the MYGA; only choose indexed if you understand the cap mechanics and won't need the funds for 7 to 10 years.

Can I get my money out of a fixed annuity early?

Partially. Most contracts allow penalty-free withdrawals of around 10% of the value each year. Beyond that, surrender charges apply during the term, and withdrawing gains before age 59½ adds a 10% IRS penalty. Fixed annuities fit money you won't need during the term, not your emergency fund.

What happens when my annuity term ends?

You have four options: withdraw your money, renew with the same carrier at their new rate, move to a better contract tax-free through a 1035 exchange, or convert to guaranteed income. Auto-renewal is rarely the best available deal, so compare the market 30 to 60 days before maturity.

Fixed Annuities in 2026: Safe Growth for the Money You Can't Afford to Lose

Q: What is a fixed annuity?

A fixed annuity is an insurance contract that guarantees a set interest rate on your money for a fixed term, typically 3 to 10 years. The most common type, a multi-year guaranteed annuity (MYGA), works much like a bank CD but is issued by an insurance company, usually pays a higher rate, and grows tax-deferred.

Q: Can I move my Roth IRA into an annuity?

Yes, but only one way: a direct trustee-to-trustee transfer into an annuity issued as a Roth IRA. Done correctly, your money keeps growing tax-free with tax-free withdrawals and no required minimum distributions. Never move Roth funds into a regular non-qualified annuity, because that counts as a distribution and can trigger taxes and penalties.

Q: Are fixed annuities safe?

Fixed annuities carry no market risk. Your principal and rate are contractually guaranteed by the issuing insurance company. They are not FDIC insured; guarantees rest on the insurer's claims-paying ability, which is why carrier financial-strength ratings matter more than chasing the single highest rate. State guaranty associations provide an additional backstop within limits.

Short answer: a fixed annuity locks in a guaranteed interest rate on your savings for a set term, and in mid-2026 those rates are near 15-year highs, typically paying 1% or more above the best bank CDs, with tax-deferred growth on top. For retirement money you want growing safely, this is one of the strongest environments in a generation, and forecasts say rates drift down from here, not up.

Key takeaways

Top fixed annuity (MYGA) rates from highly rated carriers: roughly 5% to 5.75% as of mid-2026, near 15-year highs.
Best 5-year bank CDs: roughly 4.2% to 4.65%. MYGAs have out-paid CDs by 1% to 1.75% for two years running.
Growth is tax-deferred, with no 1099 every year like a CD; you're taxed only when you withdraw.
Zero market risk: principal and rate are contractually guaranteed by the insurer.
Roth IRA money can move into an annuity, but only by direct transfer into a Roth IRA annuity. Done right, growth stays tax-free forever.
Typical liquidity: about 10% per year penalty-free during the term.
My comparison help costs you $0. Carriers pay me, and your rate is identical either way.

What is a fixed annuity, in plain English?

A fixed annuity is a contract with an insurance company: you deposit a lump sum, they guarantee a set interest rate for a set number of years, usually 3, 5, 7, or 10. The most popular version, a multi-year guaranteed annuity (MYGA), is the insurance world's answer to a bank CD: same predictability, usually a better rate, plus tax deferral.

That's the whole machine. No stock market, no fees eating your balance (MYGAs have no annual fees), no guessing. At the end of the term you take your money, roll it into a new contract tax-free, or turn it into guaranteed income. It's not exciting, and for the portion of your retirement savings that must not shrink, that's exactly the point.

Fixed annuity vs. CD: which pays more in 2026?

Fixed annuities, and it isn't close right now. Top MYGA rates from strong carriers are running roughly 5% to 5.75% as of mid-2026, while the best 5-year CDs pay about 4.2% to 4.65%. Add tax deferral and the gap widens further. On a $200,000 five-year contract, deferral alone can be worth several thousand dollars for a retiree in the 22% bracket.

Factor	Fixed Annuity (MYGA)	Bank CD
Typical top rates, mid-2026	About 5% to 5.75% (strong carriers)	About 4.2% to 4.65%
Taxes on interest	Deferred until withdrawal	Taxed every year, even if reinvested
Backing	Insurer's claims-paying ability plus state guaranty limits	FDIC insured to limits
Access during term	About 10% per year penalty-free is typical	Early-withdrawal penalty
Best for	Retirement money untouched for the term, ages about 55 to 75	Shorter horizons, money needed sooner

The honest fine print: a CD is FDIC-insured and an annuity is not. Annuity guarantees rest on the insurance company, which is why I only recommend carriers with strong AM Best ratings, and why chasing the single highest advertised rate (often from a lower-rated insurer) is usually the wrong move. The extra 0.3% isn't worth a weaker guarantee.

Can I move my Roth IRA into an annuity?

Yes, but only one way, and the wrong way is expensive. The correct move is a direct trustee-to-trustee transfer into an annuity issued as a Roth IRA. Done that way, your Roth status rides along intact: tax-free growth, tax-free withdrawals, and no required minimum distributions. Moving Roth money into a regular (non-qualified) annuity instead counts as a distribution, potentially taxable and penalized.

Here's the honest nuance most annuity salespeople skip: an annuity's headline benefit is tax deferral, and inside a Roth that benefit is redundant, because the Roth is already tax-free. So the decision inside a Roth comes down to one thing only: do you want the guarantee and the rate? If your Roth is sitting in a CD at 4.2%, or a bond fund that can lose value, a MYGA paying 5% or more with zero market risk, growing tax-free forever inside the Roth wrapper, is a straightforward upgrade for the conservative slice of your savings. If your Roth is your long-term growth engine in stock funds and you're comfortable with the ride, an annuity may not belong there at all. Both answers are legitimate; it depends on what that money is for.

Fixed annuity or indexed annuity: which is better in a Roth?

A fixed annuity (MYGA) gives you a known, contractual number, roughly 5% to 5.75% from strong carriers right now. A fixed indexed annuity (FIA) gives you market-linked upside with a 0% floor: in a good year you earn up to a cap (currently around 8% to 12% on common annual strategies), in a bad year you earn zero but lose nothing. Certainty favors the MYGA; upside potential favors the FIA, at the price of complexity.

The complexity is the part to respect. FIA caps and participation rates can be reset by the carrier at each contract anniversary, surrender periods run longer, and the crediting math takes real explanation. My rule of thumb: the MYGA is for "must not lose, must know the number" money; the FIA is only for someone who genuinely understands the cap mechanics, won't need the funds for 7 to 10 years, and wants a shot at more than the fixed rate without risking principal. Either way, inside a Roth, whatever it earns comes out tax-free, which quietly amplifies whichever choice earns more. And either way, a proper suitability review of your age, liquidity, and overall picture comes first. That's not fine print to me; it's the job.

Are fixed annuities safe?

Fixed annuities carry zero market risk. Your principal cannot decline and your rate is locked by contract. The safety question that actually matters is the insurance company behind the guarantee. Stick with strongly rated carriers (AM Best A- or better is the standard guidance) and stay within your state guaranty association limits, and you're holding one of the most conservative instruments in retirement planning.

This is where independent help earns its keep. I'm not captive to one carrier, so I compare rates and ratings across the market and tell you plainly when a headline rate comes from a company I wouldn't put my own family's money with. The guarantee is only as good as the guarantor.

I currently shop the fixed annuity market across carriers including Athene, Corebridge Financial (American General), Lincoln Financial, American National, Oxford Life, and OneAmerica, established insurers with strong financial-strength ratings. When I show you a rate comparison, those are real contracts from companies I'd trust with my own family's money, not a teaser rate from a carrier you've never heard of. Carrier availability varies by state; your comparison reflects what's actually offered where you live.

When can I access my money?

Most contracts let you withdraw about 10% of the value each year penalty-free. Beyond that, surrender charges apply during the term, and the IRS adds a 10% penalty on gains withdrawn before age 59½. The rule of thumb: fund a fixed annuity only with money you won't need until the term ends.

And when the term does end, you're 30 to 60 days from a decision most people sleepwalk through: do nothing and the contract auto-renews at whatever the carrier offers, rarely the best deal on the market. The smarter play is comparing current rates and, if better exists, moving via a tax-free 1035 exchange. I do that maturity check for clients as a standing service; it's ten minutes that regularly adds real yield.

Who should NOT buy a fixed annuity?

Anyone who may need the money during the term, anyone without a separate emergency fund, and anyone being pitched an annuity as a replacement for all their investments. A fixed annuity is a tool for the safe portion of your savings, not a whole plan.

You'll notice most annuity websites don't include this section. I do, because my business is built on people trusting me for the second decision, the fifth, and the referral to their sister, not on one commission. If a fixed annuity isn't right for your situation, I'll say so and tell you why.

Why fixed annuities pair naturally with Medicare planning

The same conversation that settles your Medicare coverage also covers your income, health, budget, and comfort with risk, and that's the conversation that reveals whether idle savings are earning enough. Many of my clients discover they're holding CDs at 4% or savings accounts at less while 5% or better guaranteed rates exist, simply because no one ever compared for them.

One caution worth knowing: annuity interest, when withdrawn, counts as income, and large withdrawals can affect your Medicare premiums through IRMAA, the income-related surcharge on Parts B and D. (Qualified withdrawals from a Roth IRA annuity, notably, do not count toward IRMAA, one more reason the Roth question deserves a careful answer.) Coordinating all of this is exactly the kind of planning a Medicare-focused advisor can do that a bank teller can't. It's also worth reviewing alongside life and final expense coverage as part of protecting what you've built.

How working with me goes (and what it costs: nothing)

We talk by phone about what the money is for, when you might need it, and how much guaranteed growth would change your retirement picture. I shop the market across carriers, comparing rate, AM Best rating, surrender schedule, and withdrawal flexibility, and show you the honest comparison, including the option of doing nothing. You decide. I handle the paperwork. And I'm the same person who calls you before your term matures so auto-renewal never quietly costs you money. Carriers pay me; your rate is identical whether you buy through me or anywhere else.

Rates are near 15-year highs and forecast to drift lower as older bonds roll off insurers' books. If you've been waiting for the right moment to lock in guaranteed growth, the window is open now, and narrowing.

Get today's rates for your situation

Call me directly at 512-844-3983 for a no-pressure conversation and a same-day rate comparison across carriers, or start with the free Medicare Clarity Score™ and we'll cover both sides of your retirement picture in one call.

Scott Bowling, independent licensed insurance agent, License #2882146. Licensed in Texas and 10 other states. Serving clients by phone and email.

Last updated: July 2026. Rates shown are market ranges as of mid-2026, change frequently, and vary by state, age, premium amount, and carrier. Annuity guarantees are backed by the claims-paying ability of the issuing insurance company and are not FDIC insured. This page is educational and is not investment, tax, or legal advice; consult a qualified tax professional regarding your situation.