The accumulation period is the phase of an annuity contract during which your money is growing through credited interest. For MYGAs and fixed annuities, this is the time between when you make your premium payment and when you begin taking withdrawals or annuitize the contract.
During the Accumulation Period
Your money earns the credited rate and compounds tax-deferred. You do not owe taxes on the growth until you make withdrawals. Most contracts allow penalty-free withdrawals of 5-10% per year, but the primary purpose of this phase is to let the money grow.
The accumulation period ends when you choose to withdraw your funds, transfer via a 1035 exchange, or convert the balance into income payments.
Key takeaway: The accumulation period is when your annuity is growing. For MYGAs, this is typically the full contract term (3, 5, 7, or 10 years) during which your rate is guaranteed and your money compounds tax-deferred.