Tennessee Annuity Rates: Current Fixed Annuity Yields for 2026

Tennessee Annuity Rates: Current Fixed Annuity Yields for 2026

Compare current Tennessee annuity rates across 2- to 10-year terms. See today's MYGA yields from rated carriers and learn what to ask a licensed agent.

Full written article: Tennessee Annuity Rates: Current Fixed Annuity Yields for 2026

Tennessee Annuity Rates

Transcript

SPEAKER_00 0:03

Welcome to the Tennessee Annuity Show. I'm Jessica.

SPEAKER_01 0:06

And I'm Caleb. We break down complex annuity products in plain English, fixed annuities, indexed annuities, income annuities, all of it.

SPEAKER_00 0:13

We cover the products, the fine print, and the questions you should ask before you sign anything.

SPEAKER_01 0:18

Quick note before we start. This show is for general information only and is not financial, tax, or legal advice. Annuity guarantees depend on the issuing insurance company's ability to pay claims. Talk with a licensed professional before making decisions about your retirement income.

SPEAKER_00 0:33

Alright, let's get into today's episode. So I had a conversation with my aunt over the 4th of July weekend. She's 68, just sold her house in Murfreesboro, and she's sitting on a chunk of cash. And her first question to me was, what kind of rate can I actually get on a fixed annuity right now? And I had no good answer for her in the moment.

SPEAKER_01 0:59

That's the question, right? It sounds simple. But the answer is it depends on the term you're willing to commit to, which carrier you're looking at, and honestly, what you're trying to accomplish with the money.

SPEAKER_00 1:11

Right, and she kept comparing it to what her credit union was offering on a CD. Which, fair enough. That's the mental model most people are working with.

SPEAKER_01 1:20

That comparison comes up constantly, and it's not a bad starting point, but there are some real structural differences that matter. We'll get into that. But let's start with what rates actually look like right now, because they're genuinely worth talking about.

SPEAKER_00 1:32

Yeah, let's do that. So we're looking at a snapshot from early July 2026. These are multi-year guaranteed annuities, mygas. And they're organized by term length. Walk me through what you're seeing.

SPEAKER_01 1:46

So, on the shorter end, two-year terms, you're looking at rates roughly in the five to five and a quarter percent range. The top of that tier is around five point two five. And then things get more interesting as you move out.

SPEAKER_00 1:59

More interesting meaning higher rates?

SPEAKER_01 2:02

Generally, yeah. Three-year products are showing rates up to six percent. Five year terms, and this is where it gets notable, you've got products hitting six point two five percent. Seven-year terms are up around six point two. And then here's the thing that surprises people. Ten year products are also up around six percent.

SPEAKER_00 2:20

Wait, so the 10-year isn't dramatically higher than the five year?

SPEAKER_01 2:24

Exactly, and that's counterintuitive because we're used to thinking longer commitment equals higher reward. But the rate curve on MyGas right now is relatively flat in that middle to longer range. You're not necessarily getting paid a lot more to lock up your money for 10 years versus five.

SPEAKER_00 2:39

Which is actually a meaningful data point for someone deciding between terms.

SPEAKER_01 2:44

Huge data point. If the rate difference between a five and a ten is minimal, and you might need flexibility in year seven or eight, why lock in for ten?

SPEAKER_00 2:51

Okay, so there's also this AM best rating column next to every product. And I know what it is broadly, but I think a lot of people gloss over it when they see a high rate number.

SPEAKER_01 3:01

They do, and I get it. The rate is the headline. But the AM best rating is telling you something important about the carrier's financial strength, their ability to actually pay out when the time comes.

SPEAKER_00 3:11

So on this list, you've got ratings ranging from B minus all the way up to A. That's a pretty widespread.

SPEAKER_01 3:19

It is. And uh here's the thing some of the highest rates on the page are coming from carriers with lower ratings. Not necessarily a red flag, but it's a trade-off you have to consciously make. A B minus carrier offering six and a quarter percent versus an A rated carrier offering five and a quarter, that's a real decision.

SPEAKER_00 3:39

And it's not like a B minus carrier is about to collapse, but it does mean something.

SPEAKER_01 3:44

Right. And best's ratings reflect a range of factors. Reserves, business model, claims, history. A B- isn't a failing grade in the traditional sense, but it does mean the carrier has less financial cushion than an A-rated one. And over a five or ten year term, that matters more than it would over two years.

SPEAKER_00 4:03

That's actually a really good point. The longer the commitment, the more the carrier's stability matters.

SPEAKER_01 4:08

Aaron Ross Powell Exactly. And Tennessee residents do have some protection through the Tennessee Life and Health Insurance Guarantee Association. There are limits, but it's not like there's zero backstop if a carrier runs into trouble.

SPEAKER_00 4:20

Although that's not the same as FDIC insurance on a bank account.

SPEAKER_01 4:23

Aaron Powell Not at all. FDIC covers bank CDs up to $250,000 per depositor. The State Guarantee Association has different limits and a different structure. So people shouldn't assume it's equivalent protection.

SPEAKER_00 4:35

Aaron Powell Which brings us back to my aunt's CD comparison. She's at a credit union, she's got FDIC coverage, she's comfortable. Why would she look at a MIGO?

SPEAKER_01 4:46

A few reasons. The big one is tax deferral. With a CD, the interest she earns gets reported to the IRS every year, whether she withdraws it or not. She's paying federal income tax on that growth annually.

SPEAKER_00 4:58

Even if she's just rolling it over.

SPEAKER_01 5:00

Even if she never touches it. With a MEGA, the interest accumulates inside the contract, and she doesn't owe tax on it until she actually takes a distribution. So if she's in a decent tax bracket now and expects to be in a lower one later, or if she just wants to defer the tax hit, that's meaningful.

SPEAKER_00 5:15

And in Tennessee specifically, there's a wrinkle on the state tax side, right?

SPEAKER_01 5:20

Yeah, this is actually good news for Tennessee residents. The hall income tax, which used to tax things like interest and dividend income, was fully repealed as of January 1st, 20 to 21. So Tennessee doesn't have a state income tax on wages, and it no longer taxes investment income either.

SPEAKER_00 5:37

So annuity withdrawals, no state income tax.

SPEAKER_01 5:40

For Tennessee residents, generally no. Federal tax still applies to the growth portion. And if the money came from a pre-tax source, like a rollover from a traditional IRA, then the whole withdrawal is typically subject to federal tax, but the state piece is gone.

SPEAKER_00 5:52

That's actually a bigger deal than people realize. A lot of retirees I talk to don't even know the whole tax was repealed.

SPEAKER_01 5:59

It's been a few years now, but yeah, it doesn't always make it into the conversation. A tax professional familiar with Tennessee law should still be in the loop before anyone makes withdrawal decisions. But the state tax picture here is genuinely favorable.

SPEAKER_00 6:12

Okay, let me push on something. You said the highest rate on the page is a five-year product. But is the highest rate actually the right answer for most people?

SPEAKER_01 6:21

Almost never automatically, no, and this is where I think people get tripped up. They see 6.25% and think, done, that's the one. But the rate is only one variable.

SPEAKER_00 6:32

What are the other ones?

SPEAKER_01 6:34

Surrender schedule is a big one. If you lock into a five-year MIGA and you need to pull money out in year three, maybe a medical expense, maybe a home repair, you're going to face surrender charges. Most MIGAs do have a free withdrawal provision, typically around 10% of the account value per year, but beyond that, you're paying a penalty.

SPEAKER_00 6:51

And the surrender charge schedule varies by product.

SPEAKER_01 6:54

Completely varies. Some are front loaded and taper off, some are flat for the whole term. You have to read the actual contract or have your agent walk you through it, which is really what they're there for.

SPEAKER_00 7:05

I talked to someone, a listener actually, who bought a seven-year MIGA without fully understanding the surrender schedule, and then had a family situation come up in year two, it was a rough lesson.

SPEAKER_01 7:17

That's the scenario that keeps me up at night when I think about people shopping on rate alone. The contract terms are just as important as the rate, maybe more important depending on your situation.

SPEAKER_00 7:26

So how should someone actually think about matching a term to their life?

SPEAKER_01 7:31

Think about your timeline in chunks. If you're 65 and you know you're not going to need this money for five years, and it's truly set aside money, then a five-year myga makes sense to explore. If you're 62 and you might need some of it at 65 for income, a two or three year term might be smarter, even if the rate is lower.

SPEAKER_00 7:48

And what about someone who wants income now rather than accumulation? Like they don't want to wait five years.

SPEAKER_01 7:54

That's a different product category entirely. That's more of a SPA conversation. Single premium immediate annuity. You put in a lump sum and it starts paying you income almost right away. The rates we've been talking about today are for my guess, which are accumulation products. Different structure, different purpose.

SPEAKER_00 8:15

Right. And someone who's worried about outliving their savings, that income piece might matter more than the accumulation rate.

SPEAKER_01 8:23

Aaron Powell Completely. And that's why a licensed agent conversation is so important. Because the question isn't just what rate can I get? It's what am I actually trying to solve for?

SPEAKER_00 8:33

Okay, I want to come back to something practical. Let's say someone in Knoxville sees a rate on a website today. Maybe they're looking at this exact page and they call an agent tomorrow. Is that rate still available?

SPEAKER_01 8:46

Maybe. Maybe not. MyGA rates can change weekly, sometimes daily. Carriers adjust them based on the interest rate environment and their own internal business decisions. So a rate you see quoted today might be different by the time you submit an application.

SPEAKER_00 9:02

And even after you apply?

SPEAKER_01 9:03

This is the part people don't expect. Uh the rate isn't locked when you apply. It's locked when the contract is actually issued. And there can be a gap of days or even weeks between application and issuance. Some carriers have a rate lock provision, some don't. You need to ask your agent specifically how that carrier handles it.

SPEAKER_00 9:21

So you could apply at 6% and get issued at 5.8.

SPEAKER_01 9:25

It can happen. And it's not the carrier being sneaky, it's just how the process works. But if you don't know to ask about it, you might be surprised at closing.

SPEAKER_00 9:33

That feels like one of those things that should be in big bold letters at the top of every rate table.

SPEAKER_01 9:38

It really should. The rate you see is a snapshot of a specific moment. It's useful for comparison shopping and understanding the landscape, but it's not a binding quote.

SPEAKER_00 9:47

Let me ask a question I get from people all the time. What's the minimum to even get into one of these products? Uh, because not everyone is sitting on $100,000.

SPEAKER_01 9:57

Aaron Powell It varies oh or a lot. A lot of my gays start around $5,000 to $25,000 minimum premium. Some carriers set the floor higher. It's product specific. Uh so you'd need to check with your agent on whatever products fit your situation.

SPEAKER_00 10:13

Aaron Powell So it's not just for people with big retirement accounts. Someone with $30,000 in savings could potentially access these rates.

SPEAKER_01 10:20

Aaron Powell Potentially, yes, uh depending on the carrier and product. And that's actually one of the things that makes my guys accessible. You don't have to be a high net worth individual to use them.

SPEAKER_00 10:29

Aaron Powell Let me paint a scenario. Picture a couple. Both 65, they've got $100,000 they want to put somewhere safe-ish, they're not touching Social Security yet, they've got a pension covering their basic expenses. What's the conversation look like for them?

SPEAKER_01 10:45

So they've got some flexibility because they're not relying on this money for day-to-day income. That opens up the mid-range terms, three, five, maybe seven years. The question is whether they want to ladder it or put it all in one product.

SPEAKER_00 10:58

What does laddering look like in this context?

SPEAKER_01 11:00

Instead of putting the whole hundred thousand into a single five-year My GA, they might split it, say 40,000 in a three-year, sixty thousand in a five-year. That way, they have a chunk coming available in three years if their situation changes, and they're still capturing a solid rate on the larger portion for longer.

SPEAKER_00 11:19

And they're not betting everything on one carrier or one term.

SPEAKER_01 11:23

Exactly. Diversification across terms and potentially across carriers. It's a more flexible approach than going all in on the highest rate you can find.

SPEAKER_00 11:31

I like that framing. Although I imagine some people would rather just keep it simple. One product, one rate, done.

SPEAKER_01 11:38

And that's a totally valid choice too. Simplicity has value. But it should be a conscious decision, not just defaulting to the highest rate number on the page.

SPEAKER_00 11:47

So who does a fixed annuity actually make sense for? Like who's the person this is designed for?

SPEAKER_01 11:53

Broadly. Someone approaching or already in retirement who wants a declared contractual rate on a portion of their savings. Someone who's already maxed out their 401k and IRA and wants more tax-deferred growth. Someone who's nervous about market volatility but doesn't want to just sit in cash.

SPEAKER_00 12:08

That last one is interesting because right now cash is actually yielding something. Money market accounts, high yield savings. So the comparison isn't as lopsided as it used to be.

SPEAKER_01 12:20

True. But cash doesn't lock in a rate. If the Fed cuts rates, and there's always the possibility, your high yield savings account rate drops with it. A MyJA holds the declared rate for the full term, regardless of what rates do in the broader market.

SPEAKER_00 12:35

So if someone locks in 6% for five years and rates drop to 3% in year two, they're still getting six.

SPEAKER_01 12:43

That's the contractual commitment, yes. That's actually one of the core value propositions of a MyGa, rate certainty over a defined period.

SPEAKER_00 12:51

And conversely, if rates go up, they're stuck at six.

SPEAKER_01 12:54

Right. Which is why term selection matters so much. They have uh if you think rates are going higher, shorter terms give you more flexibility to roll into something better when the term ends. If you think rates are going to fall, locking in longer uh looks smart in hindsight.

SPEAKER_00 13:08

Nobody knows which way it's going.

SPEAKER_01 13:10

Nobody knows. Which is why laddering across terms can be a sensible middle ground. You're not betting entirely on one outcome.

SPEAKER_00 13:17

Okay, practical question. Can someone in Memphis or Knoxville, not just Nashville, actually access all of these products?

SPEAKER_01 13:25

Tennessee residents statewide can generally purchase fixed annuities? Yes. But here's the catch. Not every product from every carrier is approved for sale in every state. So a product that's available in Tennessee might not be available in Georgia, and vice versa. And even within Tennessee, your agent needs to confirm that the specific product is approved for sale here.

SPEAKER_00 13:48

So just because you see it on a rate table doesn't mean you can actually buy it.

SPEAKER_01 13:52

Correct. State approval is a real thing. Um it's another reason why working with a licensed Tennessee insurance agent, not just a general financial advisor, matters. They know which products are actually available to you.

SPEAKER_00 14:02

I want to go back to something you said earlier about the eight and nine year products, because I noticed the rates on those are actually lower than the five and seven year products. That seems backwards.

SPEAKER_01 14:13

Yeah, it does seem backwards. But it reflects how carriers price these products. It's not purely about term length. It's about how the carrier is investing the premiums on the back end, their cost of capital, competitive positioning, um, an eight-year EME GA at 5.4% versus a five year at 6.25. That's a real gap. And it should make you think hard about whether the longer commitment is worth it.

SPEAKER_00 14:36

So in this environment, the sweet spot on rate to term seems to be somewhere in that three to seven year range.

SPEAKER_01 14:42

Based on this snapshot, yeah. But I want to be careful about saying sweet spot, like it's universal, because your sweet spot depends on your timeline, your liquidity needs, your tax situation. The numbers on the page are inputs, not answers.

SPEAKER_00 14:57

Fair pushback. I was oversimplifying.

SPEAKER_01 15:00

A little. Uh, and I do it too. The rate table is seductive. You want to find the winner. But the winner for a 68-year-old widow in Nashville with a pension is different from the winner for a 55-year-old in Knoxville still working and just trying to park some savings.

SPEAKER_00 15:14

That's actually a really good way to frame it. Same rate table, completely different, right answers.

SPEAKER_01 15:19

Exactly. Which is why we always come back to use this information to have a smarter conversation with a licensed agent, not to make the decision on your own.

SPEAKER_00 15:29

And speaking of smart conversations, what are the questions someone should actually bring to that agent meeting? If my aunt called an agent tomorrow, what should she be asking?

SPEAKER_01 15:41

First, what's the surrender schedule on this product and what are the free withdrawal provisions? Second, how does this carrier handle rate changes between application and contract issuance? Third, what's the AM best rating? And has it changed recently?

SPEAKER_00 15:57

That last one is interesting. The rating can change.

SPEAKER_01 16:00

Ratings get updated. A carrier that was A-2 years ago might be B plus today, or vice versa. It's worth asking your agent if there have been any recent rating actions on the carrier you're considering.

SPEAKER_00 16:11

What else should she ask?

SPEAKER_01 16:13

What happens at the end of the term? What are her options for renewing, rolling over, or withdrawing? And is this product actually approved for sale in Tennessee? Those five questions alone will tell her a lot about whether the agent knows their stuff and whether the product is right for her.

SPEAKER_00 16:32

I love that last one as a kind of litmus test. If the agent stumbles on is this approved in Tennessee, that's a signal.

SPEAKER_01 16:39

It really is. A good agent should be able to answer that immediately. And they should be proactively telling you the things you don't know to ask.

SPEAKER_00 16:46

So to bring it back around, someone in Tennessee right now looking at this rate environment. What's the overall picture? Is this a good time to be looking at Migas?

SPEAKER_01 16:57

Rates are meaningfully higher than they were a few years ago. Six percent on a five-year contract. That's a number that would have seemed almost unreachable in the low rate environment we were in not long ago. So, in that sense, yes, the landscape is more interesting than it's been in a while.

SPEAKER_00 17:14

But you're not going to say it's a great time to buy.

SPEAKER_01 17:16

I'm not going to say that, no. Because whether it's a great time for you specifically depends on your situation, not on the rate environment in the abstract. Someone who needs liquidity in 18 months shouldn't be buying a five-year mumiga, regardless of what the rate is.

SPEAKER_00 17:30

Right. The rate environment is context, not a buy signal.

SPEAKER_01 17:34

Well said. Use it as context. Use the rate table to understand what's available and to ask better questions. But let the full picture, your timeline, your tax situation, your income needs drive the actual decision.

SPEAKER_00 17:47

And get a licensed Tennessee agent involved before you sign anything.

SPEAKER_01 17:51

Non-negotiable. These are insurance contracts with real terms and real consequences if you need to exit early. The rate is just the beginning of the conversation.

SPEAKER_00 18:03

That's it for today's Tennessee Annuity Show.

SPEAKER_01 18:06

If you have questions about your specific situation, talk to a licensed advisor.

SPEAKER_00 18:10

Visit Tennessee AnnuityRates.com for show notes or to get matched to an advisor.

SPEAKER_01 18:15

We'll see you next time.