Disclaimer: Interest rates change often. This article will be updated on a quarterly basis, but rates may change between those updates. At any time, you can review current annuity rates here, and you can download our 5-Year Annuity Tip Sheet, which is updated regularly, here.
Annuity interest rates are the highest they've been for well over 5 years. Way, way back they were pretty strong, but for these carriers to be at a 4% right now... that's a high for I'd guess at least 8 years.
Right now, most agents are writing 5-year MYGAs, so I'd like to cover some of the top products in that space. Multi-Year Guaranteed Annuities are not complicated – it's a set interest rate for a set number of years. I'd call them very "vanilla."
Investor's Heritage is probably one of the top options, because it's at 4% and has all the bells and whistles built into it. That just means you can get a 10% free withdrawal after the first year and you can start getting your accumulated interest after 30 days. All of that is included in that contract.
Another one that's pretty competitive on that front (with things built in) is Equitable, and they're also at 4%. The only difference is they have a 5% free withdrawal instead of 10%.
The Sentinel product is our most-written product right now. It is also at 4%; however if you want the 10% free withdrawal feature, you have a rider deduction of 0.08%.
When you look at the difference between 4% and 3.92%, it's really a minute deduction.
|4% Interest Rate||3.92% Interest Rate|
|$2,000 earned in year 1||$1,960 earned in year 1|
With Sentinel, you also don't have to do the suitability, which saves the agent a lot of time and headache. Sentinel also has the e-app, which is another plus.
Liberty Bankers Life 3-Year
Another annuity to mention right now would be a shorter term that we're seeing written quite a bit, which is the LBL 3-year at 3.25%. With that annuity, there are no withdrawal features, so you do have to let the money sit there.
The commission on that is almost like a 5-year – it's really close to that.
ELCO Mutual 1-Year
If you're looking for an even smaller period of time for your investment, ELCO Mutual has a 1-year annuity that is actually getting 2%.
So these are the ones that are getting the most attention right now, and that's what we're seeing the most volume in.
ELCO Eagle Flex
If you have clients who want to put in small deposits – even as small as $100 – I'd recommend looking at the ELCO Eagle Flex. Interest rates are at 3.5% - the floor is 1.75% – but this is comparable to KSKJ Flex 1 (3.65 to 4% depending on deposit amount) and Flex 2 (3.55 to 3.9%).
It's a 1-year lock-in, but what's attractive is the minimum deposit. If someone just wants to get started, this adds up. To put this in perspective, KSKJ requires $5,000 initially, and this is only $100 to get the account started.
You can add to the account at any time, but it has to be at least $100. Overall, it's a 5-year plan. The 5 year contract starts with the initial deposit, but you can add at any time. This is also different from KSKJ in that theirs is a 7-year contract.
Also, the agent gets a little commission every time the client makes a deposit.
Don’t overlook or underestimate KSKJ Life annuity products. They offer excellent withdrawal features and pay full account value at death. Member benefits can certainly be advantageous to your clients as well.
They offer a variety of competitive interest rates depending on the deposit.
Atlantic Coast Life
The Safe Haven offers a bonus in year one which is an attractive feature for your client.
If you are looking for an A-rated carrier with a very competitive annuity rate, Americo is an outstanding option.
Just as a little reminder, make sure you're asking those additional questions. It all goes back to the CNA.
If they have money in the turbulent market and want to steady the ship, that's a MYGA sale. In the bank accumulating no interest? Let's explore.
It's not complicated at all. We're happy to help.