Lock in competitive interest rates with no market risk. Fixed annuities provide predictable growth and guaranteed principal protection.
Last updated: January 2026 | Written by licensed CT insurance professionals
Fixed vs. Indexed Annuities Comparison
Understand the key differences to choose the right annuity for your needs
Types of Fixed Annuities
Multi-Year Guaranteed Annuity (MYGA)
Like a CD but with tax-deferred growth. Lock in a guaranteed rate for 3-10 years.
- • Fixed rate for the entire term
- • Simple and transparent
- • Best for: Those who want CD-like security with better tax treatment
Deferred Fixed Annuity
Accumulate savings over time with guaranteed minimum interest and potential bonus rates.
- • Minimum guaranteed rate
- • Potential for higher declared rates
- • Best for: Long-term retirement accumulation
Frequently Asked Questions
Compare Fixed Annuity Rates
Get personalized rate quotes from top-rated carriers.
Guaranteed Rate
Lock in a fixed interest rate for a set period. Know exactly what you’ll earn.
Principal Protection
Your principal is protected from market losses. No risk of losing money.
Tax-Deferred Growth
Earnings grow tax-deferred until withdrawal, potentially lowering your tax bill.
Predictable Income
Convert to guaranteed lifetime income when you’re ready for retirement.
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Expert Answers
What is the difference between fixed and indexed annuities?
Fixed annuities pay a guaranteed interest rate for a set period, similar to a CD but with tax-deferred growth. Indexed annuities credit interest based on the performance of a market index like the S&P 500, subject to caps and participation rates. Both protect your principal from loss. Fixed annuities offer predictability while indexed annuities offer potentially higher returns with more complexity.
How are fixed annuities taxed?
Fixed annuities grow tax-deferred, meaning you don’t pay taxes on interest earned until you withdraw money. Withdrawals are taxed as ordinary income (not capital gains). If you withdraw before age 59½, you may owe a 10% IRS penalty in addition to income tax. The tax-deferred growth can be beneficial for those in high tax brackets during their working years who expect to be in a lower bracket in retirement.
What is a Multi-Year Guaranteed Annuity (MYGA)?
A Multi-Year Guaranteed Annuity (MYGA) is a type of fixed annuity that guarantees the same interest rate for the entire contract term, typically 3-10 years. MYGAs are often compared to bank CDs because of their simplicity and guaranteed rates, but they offer tax-deferred growth that CDs don’t provide. At the end of the term, you can renew, transfer to another annuity, or take the money.
How do fixed annuities work?
You deposit a lump sum or series of payments with an insurance company. The company guarantees a fixed interest rate for a set period. Your money grows tax-deferred, and you can take withdrawals or convert to lifetime income.
What interest rates can I expect?
Fixed annuity rates typically range from 3-6%, depending on the term and current interest rate environment. Longer terms often offer higher rates. We shop multiple carriers to find the best rates.
Can I access my money in a fixed annuity?
Most fixed annuities allow penalty-free withdrawals of up to 10% annually. Larger withdrawals may incur surrender charges during the surrender period (typically 3-10 years). We’ll help you understand the terms.
Are fixed annuities safe?
Fixed annuities are backed by the financial strength of the issuing insurance company. We work with highly-rated carriers (A.M. Best A- or better). Connecticut also has guaranty association protection.