What Are the Current Annuity Rates in Canada for 2025?
Canadian annuity rates in 2025 outpace CDs and bonds, delivering up to 6.15% returns plus guaranteed lifetime income that eliminates retirement risk entirely.
Current annuity rates in Canada for 2025 demonstrate competitive returns, with fixed annuities offering 5.25% to 6.15% depending on term length, while one-year products reach approximately 6.00% through select providers. Immediate life annuities provide monthly payments ranging from $449 to $971 per $100,000 invested, varying by age and gender factors. Major providers including BMO, Manulife, and Sun Life deliver these guaranteed income solutions, which outperform comparable CDs and Treasury bonds while eliminating market risk for retirement planning strategies.
In Canadian retirees navigate the complex landscape of retirement income planning in 2025, annuity rates have emerged like a critical consideration for those seeking guaranteed, predictable monthly payments throughout their golden years. Current market conditions, as of August 2025, reflect monthly updates that demonstrate varying rates based on multiple demographic and product factors, including age, gender, annuity type, and guarantee options across prominent providers such as BMO, Canada Life, Desjardins, Empire Life, Manulife, RBC, and Sun Life.
Annuity rates serve as critical factors for Canadian retirees seeking guaranteed monthly payments amid complex 2025 market conditions.
Fixed annuity rates present compelling opportunities across different term lengths, with one-year products offering approximately 6.00% through Global Atlantic, while two-to-three-year terms range from 5.25% to 6.00% primarily through Mountain Life Insurance. Longer commitments, spanning four-to-six years, typically yield 5.30% to 5.50% via providers like Americo Financial, though five-year annuities reach their highest point at 6.15% through Wichita National Life Insurance, and seven-to-ten-year products maintain steady ranges around 5.40% to 5.80%. When comparing investment options, 3-year MYGA rates significantly outperform similar-term high-yield CDs at 5.10% and U.S. Treasury bonds at 4.80%.
Monthly payout calculations, based on $100,000 registered fund premiums, reveal significant variations influenced by demographic factors and product selections. Male single life annuitants aged 55 to 80 can expect monthly payments ranging from $449 to over $970, with providers like BMO and Manulife delivering competitive rates exceeding $937 and $971 respectively at age 80. Female annuitants typically receive lower payments due to longer life expectancy projections, while joint life products adjust payouts downward compared to single life alternatives. Among the leading providers, Empire Life consistently offers some of the most competitive rates across multiple categories, with particularly attractive options for both male and female single life annuities without guarantee periods.
The fundamental appeal of guaranteed annuities lies in their elimination of market risk and management fees, providing fixed retirement income that protects against longevity concerns while offering tax advantages within registered retirement accounts. These products prove particularly valuable for self-employed Canadians lacking employer pension plans, delivering peace of mind through predictable income streams regardless of market fluctuations.
Available annuity types cover life annuities providing lifetime income, term-certain products guaranteeing payments for specific periods, variable annuities combining fixed and investment-linked components, immediate annuities commencing payments quickly after purchase, and fixed indexed annuities growing with market indices while protecting against losses, ensuring diverse options for retirement planning needs.
Frequently Asked Questions
Can I Withdraw Money From My Annuity Before the Maturity Date?
Annuity holders can typically withdraw funds before maturity, though significant surrender charges ranging from 5-10% often apply during surrender periods lasting 5-10 years.
Most contracts include free withdrawal provisions allowing 10% annually without penalties, while special circumstances like severe illness may permit additional access. Early withdrawals trigger tax ramifications on earnings, reduce future payments, and may void certain benefits, making careful contract review essential.
How Are Annuity Payments Taxed in Canada?
Annuity payments in Canada face different tax treatment depending on their source, with registered fund annuities being fully taxable in the manner of income, while non-registered annuities only tax the earnings portion, permitting tax-free return of original capital.
Recipients receive T4A slips for reporting purposes, and payments are subject to marginal tax rates without source withholding.
What Happens to My Annuity if the Insurance Company Fails?
If an insurance company fails, provincial guaranty associations typically safeguard annuity holders with coverage ranging from $200,000 to $250,000 per policyholder, ensuring payments continue through contract transfers to solvent insurers or association intervention.
Fixed annuities receive stronger protections than variable products, while policyholders maintain priority claims over shareholders during insolvency proceedings, minimizing disruption to retirement income streams.
Can I Name Beneficiaries for My Annuity Contract?
Yes, annuity contract holders can name beneficiaries to receive remaining benefits upon death. Most Canadian annuities allow designating individual family members, charitable organizations, or trusts as primary beneficiaries, with contingent beneficiaries as backup recipients.
This designation helps avoid probate delays, enables direct payment to beneficiaries, and may provide creditor protection depending on provincial laws and specific contract terms.
What’s the Minimum Amount Needed to Purchase an Annuity in Canada?
The minimum amount needed to purchase an annuity in Canada typically ranges from $10,000 to $25,000, depending on the insurance provider and product type.
Immediate annuities commonly require $10,000 to $20,000, while more complex products with additional features may demand $25,000 to $50,000. Secondary market annuities sometimes offer lower entry points around $10,000, providing accessible options for smaller investors seeking guaranteed retirement income.
What’s next?
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. Full details of coverage, including limitations and exclusions that apply, are set out in the certificate of insurance provided on enrollment.
This article is meant to provide general information only. It’s not professional medical advice, or a substitute for that advice.
Saphira Financial Group does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.
