10-Year Fixed Annuity Rates

When you have money to invest for the long term, a 10-year fixed annuity is worth considering. Annuities provide stability and security while also providing you with the flexibility to tailor your investment to your timeline and goals. A 10-year fixed annuity can provide a higher rate than annuities with shorter terms, as well as consistent rates with minimal risk.

To decide if a 10-year fixed annuity is right for you, read on to see the ROI you could earn and learn more about the pros and cons of this investment choice.

When you buy an annuity, you make an agreement with a life insurance company. You can choose immediate income or deferred income annuities and can also benefit from tax-free growth.

A fixed annuity is one specific type of annuity you can buy. Fixed annuities have terms ranging from one to 10 years, so a 10-year annuity offers you the chance to lock in your rate for the longest possible period.

Since your rate is guaranteed during the entire 10-year time that you’re invested, these annuities are a very stable and predictable option that allows you to easily plan for your financial goals.

When you buy a 10-year fixed annuity, you will generally get a higher rate than an annuity with a shorter term, as well as a higher rate than a certificate of deposit (CD) or savings account would offer. Because you are taking on little risk to earn a relatively generous ROI, these investments can be an ideal choice for retirement planning.

When you buy a 10-year annuity, it comes with a guaranteed minimum rate set by your insurer. Insurance companies consider many factors in setting rates, including 10-year treasury yields, the Federal Reserve’s benchmark interest rate and their financial strength. If you buy an annuity with a multi-year guarantee, your initial rate is also locked in for the full decade you own the annuity.

Rates offered on 10-year annuities are typically higher than rates offered both on CDs and on shorter-term annuities as a result of the term premium. Essentially, you are rewarded with a higher ROI for agreeing to keep your money invested for a long time. You also have many more options to find 10-year annuities compared to 10-year CDs and, unlike with savings accounts that have variable rates, you don’t need to worry that your ROI will fall.

Since insurers set 10-year annuity rates, your potential ROI will differ by company. Here are some of the rates offered by popular annuity providers as of October 22, 2024.

Surging inflation in recent years caused the Federal Reserve to raise the benchmark interest rate which, in turn, resulted in 10-year annuities offering higher rates. However, the Fed recently lowered its benchmark rate by 50 basis points in its September meeting and future rate cuts are expected into 2026.

While rate drops will not cause your rate to decline once you have purchased a 10-year annuity, the rates insurers offer on new products may decline as the Fed moves forward with continued rate cuts.

You take on more interest rate risk when you purchase an annuity with such a long term, but you are rewarded for doing so with higher returns than insurers offer on annuities with shorter terms.

There are many benefits of investing in a 10-year fixed annuity that you should consider, including the following:

There are also some risks that you need to be aware of before you jump in:

Be sure to carefully research annuity providers and consider your long-term goals to ensure you can leave your money invested for a decade before you buy a 10-year annuity. A financial advisor can assist you in understanding the benefits and risks and determining if this investment deserves a place in your portfolio.

When deciding on a 10-year fixed annuity provider, there are many options available to you. Here’s what to consider as you compare the annuities offered by different insurers:

A 10-year fixed annuity can be an ideal option if you are nearing retirement in the coming years but still have some time before leaving the workforce. When retirement is closing in, putting too much money into the stock market can be too risky, so a 10-year annuity can offer a safer alternative that still provides a generous ROI.

You’ll want to consider trends in interest rates, how soon you’ll need to access your funds and what financial goals you’re hoping to accomplish to decide if a 10-year fixed annuity is right for you. If you need help, a financial advisor can offer the guidance and support you need to make the most informed choice.

Editor Norah Layne contributed to this article.