Best 5 Year Annuity Rate

The best 5-year annuity rate frequently holds a position no other MYGA term holds: it is often the rate peak of the entire MYGA yield curve. In a market where more commitment normally means more yield, the 5-year term regularly defies that expectation by matching or leading every other term length in declared rate — including terms considerably longer. This reflects a structural alignment between 5-year MYGA products and the intermediate investment-grade bond maturities that insurance carriers use to back their general account portfolios. Carriers can often generate their strongest portfolio yields in the five-year maturity zone, and those peak general account yields translate into peak declared rates for 5-year MYGA buyers. The practical consequence for a buyer is worth verifying directly rather than assuming: compare the leading 5-year rate against the terms above it before committing, because when the five-year term is at the ceiling, a buyer who selects it locks in the strongest available guaranteed fixed rate in the marketplace without taking on the longest available commitment. For the complete MYGA rate landscape across all terms, our highest guaranteed annuity rates page provides the full market context.

The 5-year MYGA is also, by a significant margin, the most popular MYGA term in the market — a status it has held across different rate environments because 60 months represents the natural intersection between meaningful rate improvement over short-term alternatives and a commitment period that most conservative savers can plan around comfortably. A retiree who is 65 when they purchase a 5-year MYGA has funds available at 70 — still within the prime years of retirement income planning — making the commitment both manageable in duration and aligned with common retirement financial planning decision points. A pre-retiree who is 60 when they purchase has funds available at 65, precisely aligned with when retirement income needs typically crystallize. The 5-year table also reveals an important buyer choice built directly into the carrier lineup: the same carriers frequently appear twice, once at their maximum declared rate with limited or no penalty-free access, and again at a lower rate with a double-digit annual penalty-free withdrawal provision built in. That side-by-side structure lets buyers see precisely what access costs, which is rare in the MYGA marketplace and makes the 5-year tier unusually decision-friendly for anyone who needs to weigh both dimensions at once. For the full surrender charge mechanics, our resource on annuity surrender charges explained provides the complete pre-commitment mechanics.

The 5-year term’s rate position creates a specific planning opportunity for buyers who can genuinely commit to 60 months: locking the declared rate for the full period provides five consecutive years of guaranteed conservative fixed income at a rate that typically exceeds what bonds, CDs, savings accounts, or shorter-term MYGAs offer, and that cannot be reduced during the term regardless of what interest rates do. If rates decline during the term, the 5-year buyer is protected at a rate that may prove difficult to replicate at renewal. If rates rise, the term matures soon enough for the buyer to reassess and reenter the market at whatever new levels prevail. The rate protection value of a five-year lock is arguably strongest at this term precisely because the five-year rate so often sits at the ceiling of what the MYGA market offers — there is little yield left further out on the curve to compensate for a longer commitment. For buyers who have determined that a MYGA structure is appropriate for their conservative savings goals, our resource on whether annuities are worth it and the foundational annuities overview provide the value proposition framework, while our resource on tax-deferred annuity strategies covers how five years of compounding deferral amplifies the rate advantage beyond its stated value.

What Is a 5-Year MYGA and How Does It Work?

A 5-year Multi-Year Guaranteed Annuity deposits a lump sum premium with a licensed insurance carrier in exchange for a contractually declared interest rate guaranteed for exactly 60 months. The declared rate is set at issuance and cannot be reduced during the term — regardless of market conditions, interest rate movements, or internal carrier decisions. Principal is fully protected: the accumulated value cannot decline due to any market loss during the 5-year period. Interest compounds annually on the full accumulation balance, building guaranteed growth year over year. At the end of month 60, a maturity window opens — typically 30 days — during which the buyer can withdraw the full accumulated value penalty-free, renew into a new contract at then-current declared rates, or convert to a different annuity structure. If no action is taken during the maturity window, most contracts auto-renew at the carrier’s then-current 5-year declared rate. The maturity value is knowable to the dollar on the day you sign: compound your deposit at the declared rate across five years and that is exactly what the contract pays, with zero market exposure throughout the term.

💰 Best 5-Year Annuity Rates (as of September 2026)

The table below shows the top 5-year MYGA options, including both maximum-rate products and the penalty-free-withdrawal versions of the same carriers’ products — giving buyers a clear, side-by-side view of exactly what annual liquidity costs. The pattern to read for is the same carrier appearing on two rows: one row carrying the higher declared rate with a limited or absent free-withdrawal allowance, and a second row carrying a lower rate with a double-digit annual allowance built in. The gap between those two rows is the price of liquidity, stated explicitly. Note that the allowances are not identical across the withdrawal versions either — some cover every contract year while others begin only in year two, so read the withdrawal column alongside the rate rather than assuming the discounted product delivers access from day one. Confirm live quotes for your specific state, age, and deposit amount before purchasing.

Rates are subject to change and may vary by state, age, and deposit size. The lower-rate versions of Mountain Life and Wichita National are the same carriers’ products with 10% annual penalty-free withdrawal built in — offered at a reduced declared rate in exchange for the liquidity provision. A-rated 5-year MYGA alternatives are available at modestly lower declared rates. Guarantees backed by the carrier’s claims-paying ability and state guaranty associations within applicable limits.

Why the 5-Year Term Often Sits at the Rate Peak of the MYGA Yield Curve

The 5-year MYGA’s frequent position as the MYGA rate peak reflects a structural alignment between five-year insurance general account investing and the intermediate investment-grade bond market. Insurance carriers that issue MYGAs invest policyholder premiums primarily in investment-grade corporate bonds, agency securities, and structured fixed income instruments. The five-year maturity zone often offers the most attractive yields on a risk-adjusted basis relative to shorter and longer durations, because the shape of the yield curve tends to reward five-year commitments more efficiently than either very short-term or very long-term bond investments. When carriers achieve better portfolio yields at five-year bond durations, they translate those higher investment yields into higher declared rates for 5-year MYGA buyers.

For buyers, the implication is that the 5-year MYGA may be not just the most committed option within a manageable time horizon, but genuinely the highest-returning guaranteed fixed annuity across the full term spectrum. That is worth confirming rather than assuming, because the relationship shifts as carriers reprice: check the leading rate at six, seven, eight, nine, and ten years against the five-year before you commit. Where extending the term produces no rate improvement — or a lower rate, which does happen — the five-year is the objectively better selection for a buyer evaluating on yield, since additional surrender exposure without additional yield is a cost with nothing on the other side of it. This dynamic is the reason the 5-year term has earned its status as the most widely purchased MYGA commitment length.

The Rate-vs.-Access Trade-Off — What Penalty-Free Liquidity Actually Costs at 5 Years

The 5-year rate table makes a rare and valuable comparison available: the same carriers frequently offer both a maximum-rate version and a penalty-free-withdrawal version of their product side by side, which makes the cost of annual liquidity explicit rather than theoretical. The higher-rate row typically carries a low single-digit allowance beginning in year two, or no allowance at all. The lower-rate row from the same carrier carries a double-digit annual allowance. Subtract the second rate from the first and you have the annual price of that liquidity in percentage points; multiply by your premium and by five and you have it in dollars across the full term.

Run that calculation before deciding, because the answer is specific to your deposit and to how much access you actually need. For buyers who genuinely will not need more than a small annual withdrawal after the first year, the maximum-rate product is the better economic outcome and the liquidity premium is money left on the table. For buyers who need substantial annual access — for income supplementation, required distribution accommodation, or simple financial flexibility — the discounted product delivers it at a cost you can now state precisely rather than guess at.

One detail deserves particular attention when more than one withdrawal-version product appears in the table. The allowances are not necessarily equivalent even when the rates are close. A provision covering every contract year including the first is meaningfully more flexible than one that begins in year two, and that difference matters enormously to a buyer whose need starts immediately — the year-two-only version gives them nothing in the first twelve months regardless of the headline percentage. Compare the withdrawal column across all the discounted rows, not just their rates, and note which years each allowance actually covers. Where one product offers access in all years and another at a similar rate offers it only from year two, the first is the stronger choice for anyone needing liquidity throughout the term. Understanding what a market value adjustment is and how it interacts with withdrawals above the penalty-free amount is equally important for any 5-year MYGA selection, particularly for the products with zero or limited free access where any excess withdrawal triggers both surrender charges and a potential MVA adjustment.

The 5-Year vs. 4-Year — Often the Strongest Adjacent-Term Rate Case in the Spectrum

The comparison between the best 4-year MYGA rate and the best 5-year rate frequently represents the strongest adjacent-term rate case anywhere in the MYGA yield curve — a wider margin for twelve additional months of commitment than any other single step. Size it against your own deposit: subtract the 4-year rate from the 5-year rate, multiply by your premium, and multiply by five for the full term. In most rate environments that figure substantially exceeds what the step from three years to four produces, which is typically the flattest step on the curve.

Buyers with genuine 60-month holding capacity should evaluate that improvement seriously, and the case is strengthened when the five-year is simultaneously the rate peak — better not only than the four-year but than every longer term as well, which means there is no yield argument for extending further. For buyers whose planning horizon is bounded at 48 months, the 4-year remains the correct structural match regardless of what the five-year pays, because a surrender charge on an early exit will erase the rate difference many times over. Match the term to the date you expect to need the money, then optimize rate within that constraint rather than the reverse.

The Counterintuitive Comparison — Check Whether Longer Terms Actually Yield More

One of the most important things to verify in the MYGA market is whether extending beyond five years actually improves the declared rate. Buyers reasonably assume it must — longer commitment, higher yield — and that assumption is frequently wrong at this part of the curve. It is common for six-, seven-, eight-, and ten-year rates to sit at or below the five-year leader, which means a buyer stepping out to a longer term can end up accepting years of additional surrender exposure while earning less per year than the five-year would have paid.

The arithmetic on that is worth doing explicitly, because it is the kind of error that is invisible until you run it. Take the five-year rate and a longer term’s rate, multiply each by your premium, and compare what each produces across the five-year overlap. If the longer term pays less per year, the five-year buyer finishes the overlap period ahead and is free to reassess, while the longer-term buyer is still locked in with years remaining. When the curve is flat or inverted beyond five years, the 5-year MYGA becomes the objectively optimal selection for buyers evaluating on rate: the highest available yield at what is, among the higher-rate MYGAs, a relatively shorter commitment. Verify it against the current figures rather than relying on the general shape, since the curve moves. Our resources on 6-year, 7-year, 8-year, 9-year, and 10-year provide the complete rate context.

60-Month Tax Deferral — The Full Compounding Advantage at the 5-Year Term

The tax-deferral advantage of a MYGA compounds more meaningfully at the 5-year term than at any shorter-term alternative. Five consecutive years of credited interest accumulating without annual income tax creates a compounding chain that separates the MYGA’s effective after-tax yield from a CD taxed annually at the same stated rate. The mechanism is straightforward: the MYGA holder earns interest each year on the full pre-tax balance, while the CD holder pays tax annually and compounds every subsequent year on a base already reduced by those payments. Over five years that gap widens rather than staying constant.

To size it on your own numbers, multiply your deposit by the declared rate to get one year of credited interest, multiply that by your marginal tax rate to find what a CD holder would owe annually, and total it across the five years. That sum is what stays inside the contract compounding instead of leaving as tax payments — and it is why a MYGA’s effective after-tax yield exceeds its stated declared rate for buyers in meaningful brackets, and why the comparison against a CD should always be run after tax rather than on headline rates. Our resource on fixed annuities vs. CDs provides the full after-tax mechanics at different tax brackets, and the non-qualified annuity guide covers how the deferred interest is eventually taxed at distribution for after-tax funded contracts.

Why the 5-Year Term Is So Popular Among Conservative Investors

The 5-year MYGA’s popularity reflects four converging factors that no other term combines as effectively. First, it is frequently the MYGA rate peak — buyers who want the highest available guaranteed fixed rate often get it at five years rather than by committing further out. Second, 60 months aligns naturally with common retirement planning decision horizons. Third, the five-year maturity is short enough that most buyers can genuinely plan around it without the open-ended uncertainty that eight-to-ten-year commitments create. Fourth, prevailing 5-year declared rates are typically competitive enough with moderate-risk alternatives that the market would need to outperform by a meaningful margin to justify the additional volatility for the conservative portion of a retirement portfolio. For buyers who want the complete framework for evaluating whether the 5-year MYGA’s combination of rate strength and 60-month commitment serves their specific planning needs, our fixed annuity ladder strategy guide provides the portfolio integration framework. For buyers transitioning from existing annuity contracts at lower rates, our annuity rescue plan covers the 1035 exchange process for repositioning into a stronger available rate. For those who eventually want to convert accumulated value to guaranteed lifetime income at maturity, our resource on best fixed indexed annuities with lifetime income riders covers the income structures most commonly evaluated at 5-year MYGA maturity.

Comparing Fixed vs. Indexed and Bonus Annuities at the 5-Year Term

While a 5-year MYGA offers predictable fixed interest, some investors evaluate indexed or bonus annuities for additional growth potential or premium credits. Indexed annuities link interest to external market indices without direct downside exposure, while bonus annuities may offer upfront credits in exchange for longer surrender periods. At the five-year commitment level, the MYGA’s frequent rate-peak position makes the fixed alternative unusually competitive against indexed structures: to outperform a guaranteed five-year declared rate over the full term, a fixed indexed annuity must average more than that rate in actual annual crediting, which requires consistently strong index performance measured against the contract’s caps, spreads, and participation rates. Take the guaranteed rate from the table as your benchmark and ask whether the indexed alternative is likely to clear it net of those limiting factors — a question worth answering with the specific product’s crediting history rather than its illustration. For buyers specifically evaluating whether to lock the five-year fixed rate or pursue a bonus annuity structure with higher potential income at a longer surrender period, our resource on what to do with an IRA after retiring provides the decision framework for qualified account holders making this evaluation.

Compare Annuity Rates by Term Length