Bonus Annuity Comparison
Compare Bonus Annuities Side by Side
See how bonus FIAs stack up against traditional fixed annuities and standard FIAs—then get a personalized report for your state and deposit amount.
Bonus Annuity Comparison Guide: Bonus annuities can give your retirement dollars an initial boost while protecting principal and deferring taxes. But not all bonuses work the same way. Some apply to the accumulation value you can later withdraw or annuitize; others primarily enhance an income base used to calculate future lifetime payouts. This guide explains how bonus annuities compare with traditional fixed annuities and standard FIAs, what trade-offs to watch, and when a bonus structure may make sense.
✅ Current Bonus Annuity Offers (as of October 2025)
| Term | Bonus | Provider | Product | AM Best Rating |
|---|---|---|---|---|
| 5 Years | 12% | GILICO | Growth Builder 5 | A- |
| 7 Years | 17% | Am. Life | American Select Bonus | A |
| 8 Years | 3% | Nationwide | New Heights Select | A+ |
| 9 Years | 5% | Americo | Ultimate One | A |
| 10 Years | 23% | Midland National | Index Builder Plus | A+ |
| 14 Years | 29% | North American | NAC Charter Plus | A+ |
| 15 Years | 27% | Athene | Performance Elite Plus | A+ |
Bonus amounts apply to the initial premium and may vary by state availability, rider selection, and contract terms. Some products include lifetime income riders, enhanced death benefits, or additional liquidity features.
What is a Bonus Annuity?
How bonus annuities credit value and why carriers offer them
A bonus annuity—usually a fixed indexed annuity (FIA)—adds extra value via an upfront credit or a contractual growth feature. You still get principal protection and tax-deferred accumulation, but the bonus aims to jump-start value or improve future income quotes. For a refresher on baseline choices, see our annuities basics and options and compare today’s current fixed annuity rates.
Types of Annuity Bonuses
Accumulation bonuses vs. income-base bonuses vs. step-up features
- Upfront premium bonuses (accumulation): A percentage (e.g., 5–15%) may be added to your accumulation value, sometimes with a vesting schedule. This can help future withdrawals or lump-sum planning.
- Income-base bonuses (rider focus): The bonus may apply only to an income base used for lifetime payouts—great for income quotes later, but it may not increase your cash value for surrender or free withdrawals.
- Contractual step-ups / guarantees: Some designs emphasize a multi-year growth floor toward a future value (e.g., a 10-year guaranteed level), while still allowing index-linked upside.
Whichever style you consider, compare them to a best fixed annuity for retirees and a best fixed indexed annuity to make sure the bonus offsets any caps, spreads, or surrender terms.
Bonus Annuity Comparison Chart
Bonus FIAs vs. fixed annuities vs. standard FIAs
The chart below highlights core differences. (We also show an example of a 10-year bonus FIA design often referred to as a “40% bonus annuity” to illustrate a contractual growth floor.)
| Feature | 40% Bonus Annuity | Traditional Fixed Annuity | Standard Bonus FIA |
|---|---|---|---|
| Guaranteed Growth | 40% guaranteed increase over 10 years (140% of premium) | 2–6% annual fixed interest, varies by term | 5–15% upfront bonus, usually rider-only |
| Principal Protection | 100% protected | 100% protected | 100% protected |
| Upside Potential | Yes — index crediting options plus guarantee | No — fixed interest only | Yes — index crediting with caps/spreads |
| Liquidity | 7% free withdrawals annually | 10% free withdrawals annually | 10% free withdrawals annually |
| Income Rider Impact | Boosted account value enhances lifetime income | Based only on fixed accumulation | Bonus may enhance income base, varies by carrier |
| Best For | Retirees wanting long-term growth and upside | Conservative savers seeking steady returns | Those who value upfront bonus for income planning |
Key Trade-offs and Fine Print
Bonus annuity features to verify before you buy
- Where the bonus applies: Accumulation value, income base, or both? This affects cash access vs. future lifetime payouts.
- Vesting and surrender rules: Some bonuses vest over time; early surrender can reduce credited amounts. Review the schedule carefully.
- Caps, spreads, and participation rates: A richer bonus can be paired with tighter index terms. Compare long-run projections, not just the headline bonus.
- Liquidity constraints: Most FIAs allow limited free withdrawals. Exceeding that limit can trigger charges.
- Tax implications: Growth is tax-deferred, but withdrawals are generally taxed as ordinary income. For payout taxation, see our annuity exclusion ratio guide.
Who a Bonus Annuity Fits Best
Investor profiles that benefit from bonus structures
- Later income planners: You want to enhance future payout quotes and can keep funds in place through the surrender period.
- Principal-first savers: You value principal protection with potential index-linked growth and a bonus-driven head start.
- Longer time horizons: You can commit to a multi-year term to maximize bonus vesting and index accretion.
Illustrative Example (10-Year Horizon)
Fixed annuity vs. standard bonus FIA vs. 10-year bonus FIA
Assume $300,000 premium, no additional contributions; results vary by carrier, state, and selections.
- Fixed annuity: A declared rate (e.g., ~5%) compounds reliably; great for simplicity and shorter terms.
- Standard bonus FIA: A 5–15% upfront boost often applies to the income base; cash value growth depends on index terms.
- 10-year bonus FIA concept: Combines index crediting with a contractual growth floor at year 10, aiming to improve both flexibility and future income quotes.
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- Check today’s current fixed annuity rates
- Explore the best fixed indexed annuity choices
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FAQs: Bonus Annuities, Fixed Annuities, and FIAs
What exactly is a bonus annuity?
A bonus annuity—usually a fixed indexed annuity—adds extra value via an upfront credit or a contractual step-up, while protecting principal and deferring taxes.
Does the bonus increase my cash value or only the income base?
It depends on the product. Some bonuses raise the accumulation value; others apply only to an income base for lifetime payout calculations. Always verify where the bonus applies.
Are there vesting schedules on the bonus?
Often yes. Bonuses may vest over time and can be reduced with early surrender. Review the vesting schedule and surrender charges before purchasing.
How do caps, spreads, and participation rates affect growth?
They govern how much index interest you can earn. A bigger bonus can be paired with tighter index terms, so compare long-run projections—not just the headline bonus.
What liquidity will I have each year?
Most FIAs allow limited free withdrawals (e.g., 7–10% annually). Exceeding that amount or surrendering early can trigger charges and reduce values.
Is my principal protected from market losses?
Yes. With FIAs, negative index years usually credit zero rather than a loss (fees, if any, still apply).
How are bonus annuities taxed?
Growth is tax-deferred; distributions are generally taxed as ordinary income. For payout taxation mechanics, see our annuity exclusion ratio guide.
Are bonus annuities available in every state?
Availability varies by carrier and state approvals. We’ll verify your eligibility and provide comparable alternatives if needed.
How do bonus annuities compare to fixed annuities?
Fixed annuities credit a declared rate and are simple and predictable. Bonus FIAs can improve starting value or income potential but include index mechanics and more rules to review.
Who should consider a bonus annuity?
Investors seeking principal protection, the possibility of higher long-term value or income quotes, and who can commit to a multi-year term with limited withdrawals.
