Looking for the best 5-year annuity rate? You’re in the right place. A 5-year fixed annuity (MYGA) is one of the most popular terms because it often delivers a stronger guaranteed yield than shorter durations—without locking funds up for a decade. At Diversified Insurance Brokers, we compare offerings from 75+ top-rated carriers to help you secure competitive guarantees with clarity and zero sales pressure.

A 5-year fixed annuity guarantees a set interest rate for 60 months, provides principal protection, and credits tax-deferred growth. At maturity, you can renew, roll into a different term, or take a full withdrawal—giving you flexibility as rates and goals evolve.

What Is a 5-Year Fixed Annuity?

A 5-year MYGA is a contract with an insurance company that credits a guaranteed fixed rate for five consecutive contract years. Interest compounds tax-deferred until you take distributions. When the term ends, most contracts offer an election window to renew at then-current rates, transfer to another annuity, or withdraw without surrender charges.

Who Should Consider a 5-Year Annuity?

The 5-year term appeals to savers who want a higher guaranteed rate than 1–4 year contracts with a commitment that still fits medium-horizon goals. Consider a 5-year MYGA if you are:

• Laddering across terms (3–5–7 years) to keep periodic liquidity and reinvestment opportunities.
• Rolling over maturing CDs and seeking stronger multi-year guarantees.
• Targeting a known time horizon (retirement date, tuition window, planned purchase).
• Prioritizing principal protection and predictable growth over market risk.

Safety matters: We recommend carriers rated A- or better by independent agencies. Fixed annuities are supported by the insurer’s general account and state guaranty associations up to statutory limits.

Benefits of a 5-Year MYGA

• Typically Higher Guaranteed Yield: Five-year terms often credit more than 1–4 year options.
• Tax-Deferred Growth: Interest compounds without annual taxation until withdrawal.
• Principal Protection: No market downside—your contract value grows at the guaranteed rate.
• Built-In Liquidity: Many contracts allow up to 10% penalty-free each year (verify your policy).
• Flexible Maturity Options: Renew, change terms, or take a full distribution at the end of year five.

Why 5-Year Rates Move

Carrier rates track bond yields, portfolio positioning, and competition. Because those inputs change, the “best 5-year annuity rate” can shift quickly. Our team monitors 75+ carriers so you can capture favorable windows—small differences (0.15%–0.25%) can compound meaningfully over five years.

How to Compare 5-Year Annuity Options

• Financial Strength: Favor A- or better ratings for long-term reliability.
• Liquidity Provisions: Confirm penalty-free amounts (often 10%) and any interest-only access.
• Renewal Rules: Know your election window; some contracts auto-renew if no action is taken.
• Minimums & Issue Ages: Typical minimums $10,000–$25,000; age limits vary by carrier.
• MVA (Market Value Adjustment): Understand how an MVA can affect early withdrawals during the term. See our Market Value Adjustment Explained guide.

Laddering with a 5-Year “Core” Rung

Laddering spreads purchases across terms so something matures at intervals you choose. A 5-year rung often serves as the “core” of the ladder—balancing attractive yield with reasonable access. On maturity, you can roll to another 5-year if rates are compelling, extend to 7 years, or shorten if you’ll need cash sooner.

5-Year MYGAs vs. CDs & Money Markets

• Tax Treatment: Annuity growth is tax-deferred; CD interest is taxed annually.
• Yield: Insurers can often credit higher fixed rates than banks due to different investment models.
• Flexibility at Maturity: Renew, withdraw, or pivot to an income or indexed annuity based on goals.
• Risk Profile: No market volatility—your rate is contractual and guaranteed for five years.

Many retirement savers pair a 5-year MYGA with shorter and longer rungs—using the 5-year for dependable mid-horizon growth while keeping other funds liquid or positioned for higher multi-year yields.

Next Step: Compare Current Fixed Annuity Rates

See live 5-year MYGA offerings and carrier specifics on our Fixed Annuity Rate Page. Rate windows can be brief—review options now and decide with confidence.

Related Topics to Explore

• Best Short-Term MYGA Annuities
• Tax-Deferred Annuity Strategies
• Annuity Surrender Charges Explained
• Guaranteed Lifetime Withdrawal Benefits Explained
• Annuity Rollover Options for Teachers