Annuity interest rate is the rate at which a fixed annuity credits growth to the contractTMs accumulation value, or, in indexed annuities, the declared rate for fixed accounts. Interest rates can be guaranteed for a specific period or declared periodically at the insurerTMs discretion, subject to contractual minimums. In multi-year guarantee annuities (MYGAs), the interest rate is typically fixed for the full guarantee term, such as three or five years. Annuity interest rates are influenced by prevailing bond yields, insurer portfolio returns, and competitive pressures. For clients, the credited interest rate directly affects how quickly values grow and how attractive the annuity is compared with CDs, treasuries, or bond funds.

Advisors monitor annuity interest rates when evaluating fixed annuity offers, comparing rates across carriers and terms much like they would shop for CDs. They explain the relationship between rate guarantees, surrender periods, and insurer strength ratings, helping clients choose between short-term flexibility and higher long-term rates. Advisors also highlight minimum guaranteed interest rates that apply after initial periods reset. In laddering strategies, they may allocate funds across multiple MYGA terms to balance reinvestment risk and yield opportunities. Understanding annuity interest rates allows advisors to position fixed annuities as stable, tax-deferred yield vehicles within conservative portions of a retirement portfolio.