We recommend the best products through an independent review process, and advertisers do not influence our picks. We may receive compensation if you visit partners we recommend. Read our advertiser disclosure for more info. An annuity is an insurance contract often used to save for retirement that can also guarantee lifetime income once you're ready to retire. There are multiple types of annuities designed for different risk profiles and saving goals. But generally, monies in an annuity grow on a tax-deferred basis. Your annuity rate is the percentage by which your annuity grows each year. Most annuity providers guarantee interest rates on deferred annuities for a fixed term, usually three to 10 years. The best annuities have higher rates of return, low provider fees, low minimum investment amounts, and are backed by companies with long-established reputations for financial stability and customer satisfaction. Take a look at which annuity providers and products have been proven to shepherd people to financial security in their later years. Best Annuity Rates Best Annuity Rates Final Verdict Compare the Best Annuity Rates FAQ Methodology Get $100 when you open a new Fidelity retail IRA account with $50. A 200% match. Use code FIDELITY100. Limited time offer. Offer Disclosure. With low fees, the ability to rebalance or trade without penalties, six annuities to choose from, and personal service from selection to account servicing, Fidelity scored top marks to become our best overall annuity provider. Pros Low fees, including account transfers Rebalance or trade without penalty Six annuity choices in three categories Personalized customer service with high ratings Cons Some annuities require a higher initial investment than other providers Some people have reported difficulty in making withdrawals or closing their account Fidelity, with higher customer service ratings, personalized consulting on the front-end to plan your annuity strategy, low fees, and several annuity options, earned our praise as the overall best. Opening in 1946, Fidelity has been a leader in the annuities industry for several decades and became one of the first annuities company to offer online wealth management solutions. Today, this investment management firm enjoys an A+ AM Best rating and has $9.6 trillion customer assets under management. Fidelity offers six annuities that address retirement income, asset protection, and income generation. These annuities have annual fees ranging from 0.1% with an initial investment of $1 million or more, up to 1.9%, plus pertinent mutual fund fees. Allianz sets itself apart as our choice for best fixed indexed annuity with its two income bonuses. One you earn during your retirement saving phase and the other once you begin receiving payments. Pros No annual fees on their fixed indexed annuities Minimum initial premium between $10,000 and $20,000 Seven annuity choices Start buying your annuity contract at the age of 50 Cons Fee-free withdrawals only on the 11th contract year onward It is tough to beat zero annual fees, but Allianz takes its efforts to the next level by designing in two bonuses to earn it the best fixed indexed annuity title. Customers are eligible for a 22% boost to any premium payments they make in the opening 18 months of the contract. Once you start receiving payments, you stand to gain further thanks to Allianz paying a 150% bonus on any interest your indexed assets earn. The company started in Minneapolis, Minnesota, in 1896. Allianz has since grown to become a leading provider of retirement and protection solutions both locally and internationally. Allianz Life boasts an AM Best rating of A+. Allianz offers seven fixed indexed annuities: The fixed indexed annuities have surrender charge periods between seven to 10 years, and typically start with a 10% penalty and decrease by one percent each year. Rates of return range from 7.83% to 2.26%. Allianz has a total of $2.8 trillion assets under management for 126 million retail and corporate clients. If you’re looking to take advantage of the market, a variable annuity through New York Life is for you. Their low minimum premium and flexible withdrawal structure mean that your money stays accessible to you, earning our vote for the best variable annuity. Pros Withdrawals allowed up to 10% of the account value Possibility of high returns, depending on market conditions Minimum premium is $2,500 for qualified accounts Cons Annual fees in addition to surrender charges Highest risk Maximum age is 80 The company offers a plethora of both fixed and variable annuities, but their variable plans offer some of the most promising returns on this list, earning it the top spot for variable annuities. Depending on market conditions, you could see returns of up to 8% or more. New York Life is an established name in the life insurance industry. Since 1845, the company has been protecting and growing assets. Now the largest mutual insurer in the U.S., New York Life has earned an A++ AM Best rating. New York Life charges relatively standard fees of $30 to $40 annually, and a 1.20% to 1.60% mortality and expense fee, depending on your plan. You’ll also have to pay surrender charges if you want to withdraw more than 10% of your account value at a time. Withdraw up to 10% of your account value without any penalties assuming you are over 59 1/2 years of age. You can start with a premium of only $2,500 (or $5,000 for non-qualified accounts). USAA’s Single Premium Immediate Annuity (SPIA) took the title of the best straight life annuity with its blend of low fees, immediate payment, financial stability, and a plethora of program options. Pros Income for life Not tied to market risk Your money will never earn less than the guaranteed minimum interest rate Cons Limited growth; you may not earn as much as investing in the stock market Early withdrawal penalties from the IRS Surrender charges may apply With a $0 minimum initial premium, no annual fees, and flexible program options, USAA’s SPIA stands as the best straight life annuity. Its “Lifetime Only” option guarantees income for life, and payments stop when you die because there is no beneficiary with this plan, thus offering higher regular income payments. USAA has been around since 1922 serving military members and their families with insurance, banking, investments, and retirement products like annuities. The company has over $200 billion in assets under management and an AM Best rating of A++. USAA offers deferred annuities and immediate annuities: There are no annual contract fees or upfront fees. The only charge USAA calls out is the 10% IRS penalty, which is only relevant if you make a withdrawal before age 59½. Current annual return rates range between 1% and 2%, but there is a rider option that elevates your payments by 3% every year. With a straight life policy, there is ample chance to be paid more than you put into the annuity. If you outlive your invested premium, the annuity provider continues to pay you, but this time from the provider’s account. USAA offers three different payout options. You can opt for the lifetime-only plan, where you’ll have income for life, and payment stops when you die. Or you can select a 10-, 15-, or 20-year payment term. Finally, you can design a blend of both. The lifetime and guaranteed period of time option helps you get income for life, and you can add a beneficiary who may continue to get paid if you die before the guaranteed period ends. MassMutual’s RetireEase product stands out as the best term certain annuity. It combines no annual contract fees with a low minimum initial premium, and centuries-old financial stability. Pros No annual contract fee $10,000 initial premium minimum A++ AM Best rating Choose monthly, quarterly, semi-annual, or annual payments Cons Early withdrawal fees/surrender charges before year 10 Other small administrative fees Small percentage of complaints about difficulty processing withdrawals If you’re looking for income for a specific period of time, consider MassMutual’s RetireEase. The product scored highly in our review because of its flexible program design, no annual contract fees, low entry point, and stellar financial history. Founded in 1851, MassMutual is a mutual insurance company, which means it is partially owned by its members. It has proven reliable and stable since its founding through wars, depressions, and recessions. AM Best rates it an A++. MassMutual offers the following annuity products: The minimum initial investment starts at $10,000, with annual fees in the range of 1.67% to 2.77%, plus surrender charges in years one through nine. Current return rates range from 1% to 8%. MassMutual’s customer ratings online are quite high. The company manages over $235 billion in customer assets annually, so there are of course a few complaints to be found, but these are a very small proportion compared to the total customer base. As a mutual company, MassMutual is beholden to its policyholders, not Wall Street. If you’re looking for a long-term annuity, American National has options for you. Their multi-year guaranteed annuity, our pick as the best, will show you impressive returns that are worth the wait. Pros Excellent returns starting at 4.65% Minimum premium as low as $5,000 Penalty-free withdrawal after 10 years Penalty-free death benefit Cons 10% federal penalty and income taxes apply to earnings withdrawn before age 59½ Surrender charge before year 10 Our best multi-year guaranteed annuity, American National Palladium MYG 10 Annuity, has excellent rates with a low minimum premium of only $5,000. The company offers a wide variety of insurance products, with their annuity options earning them an A rating with AM Best. The company has been in business since 1905 and manages over $31.3 billion in total assets. American National Palladium MYG Annuity 10 is a great option, no matter what premium level you choose. There are three bands from which to choose. Starting at $5,000, you will earn a guaranteed 4.65% annual yield, while putting in over $100,000 will get you 4.75%. Finally, you’ll see returns of 4.90% at their highest premium level of $250,000 or more. American National doesn’t charge an annual fee or percentage. However, you will be charged a 2.5% sales commission up front. It’s important to know that money you withdraw before the 10th year of your annuity will be subject to a fee of up to 8%, depending on the contract year. American National stands out as an annuity provider with dependable returns and very flexible plans for your unique financial situation. The company even offers an add-on service called Lifetime Income Rider to provide you with a guaranteed income, even if your annuity value is zero. When seeking the best annuities, you’ll want to first get clear about your goals. Will it be income generation? Asset protection? Reliable income in your retirement years? Some annuities can address all of these to some degree, but an advisor can steer you to a shortlist of options that are designed to excel in one. The best annuity providers offer multiple plan options with convenient online and in-person advisory services, dependable return rates, lower fees than their competitors, minimum investment requirements achievable by a broad range of people, stellar customer satisfaction ratings, and a sound financial reputation. Our best overall, Fidelity, offers the best blend of all these factors, with a track record of 40 million customers. An annuity is a contract issued by an insurance company in which you pay one or more premiums. In exchange, you receive tax-deferred growth based on a variable or fixed rate of return, and regular payments from the annuity when you're ready to retire. Annuities can guarantee lifelong income or payments for a certain number of years, and are often used as a way to fund retirement with tax-deferred growth. Whether you can lose money in an annuity depends on the type of annuity you have and how long your investment horizon is. Variable annuities pose more short-term risk than fixed annuities because they are tied to stock market performance. Fixed annuities, by contrast, offer guaranteed rates of return. But fixed annuities can underperform variable annuities long-term. The best annuity rate for a three-year annuity is 4.85%, according to Annuity.org’s online rate database. For a five-year, it’s 5.40%, and for a 10-year annuity, it’s 5.15%. That said, it’s important to keep in mind that these rates are for fixed annuities and do not reflect earnings (or loss) in a variable or equity-indexed annuity. You should only consider a deferred annuity after you have maxed out other tax-advantaged retirement investment vehicles, such as your 401(k) and IRA. If you have additional money to set aside for retirement, an annuity's tax-free growth may make sense–especially if you are in a high-income tax bracket.The best age to buy an immediate annuity, or one that pays income as soon as you buy it, is between age 70 and 75. You can buy annuities from: We researched 20 companies offering annuities and evaluated each company based on customer service, financial stability, annuity product options, minimum investment amounts, provider fees, and return rates. The providers that made it to our top six had solid, proven, trustworthy reputations; lower fees than most; and a suite of annuity options that met a wide range of financial entry points. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Fidelity. "Fidelity Investments History: Founding, Timeline, and Milestones." Fidelity. "Quarterly Updates Q3 2022 - Fidelity Investments." A.M. Best. "American Fidelity Assurance Company - AM Best Rating." Fidelity. "Fidelity Personal Retirement Annuity." Fidelity. "New York Life Premier Variable Annuity–P Series With Investment Preservation Rider–P Series." Allianz. "How Allianz Benefit Control Works." Allianz. "Allianz22." Allianz. "About It." A.M. Best. "Allianz." Allianz. "How Allianz Benefit Control Works." Allianz. "How Allianz 222 Works." Allianz. "How Core Income 7 Works." Allianz. "How Allianz 360Works." Allianz. "How Essential Income 7 Works." Allianz. "How Retirement Foundation ADV Works." Allianz. "How Allianz Accumulation Advantage Works." My Annuity Store. "Allianz Life Insurance Company of North America." Allianz. "Annual Report 2021," Page 54. Allianz. "Allianz Group Key Indicators." New York Life. "Five Things to Know About the Founding of New York Life." Best's Review. "Largest 25 U.S. Mutual Insurers 2020." A.M. Best. "New York Life Insurance Company." New York Life. "Variable Annuity Comparison Chart - New York Life Insurance." New York Life. "Premier Plus Variable Annuity II - New York Life Insurance." USAA. "USAA Company History." A.M. Best. "A.M. Best Affirms Ratings of USAA." USAA. "Annual Report to Members 2020 - USAA." USAA. "Deferred Annuities." MassMutual. "How MassMutual Was Born Back in 1851." A.M. Best. "AM Best Affirms Credit Ratings of Massachusetts Mutual Life." MassMutual. "Annuities." MassMutual. "MassMutual RetireEase Client Brochure." MassMutual. "Insurance Ratings & Financial Strength - MassMutual." A.M. Best. "American National Property and Casualty Company." U.S. Securities and Exchange Commission. "American National Group, Inc. - Form 10-K." American National. "American National Subsidiaries." Annuity Advantage. "Palladium MYG Annuity 10." Fidelity. "About Fidelity - Our Company." Annuity.org. "Annuity Rates." Related ArticlesBest Annuity Rates of 2023
Best Overall : Fidelity
Best Fixed Indexed Annuity : Allianz
Best Variable Annuity : New York Life
Best Straight Life Annuity : USAA
Best Term Certain Annuity : MassMutual
Best Multi-Year Guaranteed Annuity : American National
Final Verdict
Compare the Best Annuity Rates
Company AM Best Rating Fees Types of Annuities Type of Provider Fidelity
Best OverallA+ Initial investments of less than $1 million: Annual fee of 0.25% (+ Fund Fees); Initial investments of $1 million and above: Annual fee of 0.10% (+ Fund Fees) Personal Retirement Annuity, Variable Annuity, Deferred Fixed Annuity, Deferred Income Annuity, Clear Income Fixed Annuity, Immediate Fixed Income Annuity Investment Management Firm Allianz
Best Fixed Indexed AnnuityA+ Core Income 7 Annuity $10,000 minimum premium: 1.25% rider charge; Allianz Index Advantage Variable Annuity $10,000 minimum premium: 1.25% annual fee (+ 0.64%-0.72% variable option annual fee and 0.20% death benefit rider fee) Fixed Index Annuities, Index Variable Annuities Insurance Company, Financial Services Firm New York Life
Best Variable AnnuityA++ Annual fee: $30 to $40 (waived at $100,000); Mortality and Expense fee: 1.20% to 1.60% (depending on premium payments and account value); Surrender charges: 1% to 8% (applies to withdrawals beyond the surrender charge-free withdrawal amount, calculated based on date of premium payment) Fixed Deferred Annuities, Variable Annuities Insurance Company USAA Single Premium Immediate Annuity
Best Straight Life AnnuityA++ Annual fee: $0.00; Surrender charges for early withdrawals Lifetime and a Guaranteed Period of Time, Guaranteed Period of Time, Lifetime Only Insurance Company Mass Mutual RetireEase
Best Term Certain AnnuityA++ 1.67%-2.77% plus surrender charges in years 1-9 Deferred Fixed Annuity, Variable Annuity, Fixed Index Annuity, Immediate Income Annuity, Deferred Income Annuity Insurance Company American National Palladium MYG 10 Annuity
Best Multi-Year Guaranteed AnnuityA 2.5% upfront charge, plus surrender charges in years 1-9 High-Band ($250,000-$1,000,000), Mid-Band ($100,000-$249,999), Low-Band ($5,000-$99,999) Insurance Company How Do Annuities Work?
Can You Lose Money in an Annuity?
What Is a Good Return Rate for an Annuity?
Who Are Annuities Best For?
Where Can You Buy Annuities?
How We Chose the Best Annuity Rates
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