A Multi-Year Guaranteed Annuity (MYGA) is like a tax‑deferred CD issued by an insurance company. You give the insurer a lump sum, they guarantee a fixed interest rate for a set number of years (commonly 2–10), and your interest compounds tax‑deferred until you withdraw. There’s no stock market exposure, your principal is protected by the insurer’s claims‑paying ability, and at the end of the term you can renew, reposition, take income, or cash out—depending on your goals.
Product Type: Fixed deferred annuity (not market‑linked)
Core Feature: Guaranteed multi‑year interest rate (level for the term)
Common Terms: 3, 5, 7, 10 years (some 2 or niche variations)
Tax (Non-Qualified): Interest grows tax‑deferred; taxed when distributed
Access: Limited annual penalty‑free withdrawal; excess subject to surrender charges (and possibly MVA)
End of Term: Renew, 1035 exchange, start income, partial or full withdrawal
See Current Rates: Live MYGA Rates Below
Below is a dynamically updating feed of top MYGA rates. Use it to compare current multi-year guarantee periods. For personalized suitability, feel free to schedule a quick call.
If the table does not load immediately, please refresh or disable script blockers.
Suitability is about matching term length and liquidity features to your time horizon and goals—especially if this is part of your “safe” allocation.
| Feature | MYGA | Bank CD | Fixed Indexed Annuity (FIA) |
|---|---|---|---|
| Primary Appeal | Guaranteed multi-year rate + tax deferral | Simple guaranteed rate + FDIC (limits) | Downside protection with index-linked upside potential |
| Rate Behavior | Level for the term | Level for the term | Varies; based on index methodology (caps/spreads) |
| Tax on Growth (Non-Qualified) | Deferred until withdrawn | Taxed annually (1099-INT) | Deferred until withdrawn |
| Early Access Penalty | Surrender charges + possible MVA | Bank interest penalty | Surrender charges; indexing mechanics |
| Market Exposure | None | None | No direct loss risk; returns vary |
| Typical Duration | 2–10 years | 6 months–5 years (some longer) | 7–10+ years common |
| Use Case | Predictable compounding | Ultra-short, simple savings | Potentially higher credited growth |
Compare deeper: MYGA vs Indexed Annuity
A MYGA ladder spreads your funds across staggered maturities (for example, 3, 4, 5, 6, and 7-year guarantees). Each year, one contract matures—giving you flexibility to reinvest at then-current rates, shift to income, or take withdrawals.
Goal: Balance yield, reinvestment timing, and liquidity. Explore the full MYGA Ladder Guide.
Assume:
Future Value (Tax-Deferred): FV = 100,000 (1.051)^5 ≈ 128,000
If that same yield were taxed annually at 24% in a CD: After-tax effective rate ≈ 3.876%; FV ≈ 100,000 (1.03876)^5 ≈ 120,800.
Illustrative tax deferral difference: ≈ $7,200 (simplified; real outcomes vary).
Not a quote. Rates change. Check current rate sheet.
Consult a tax professional for personalized guidance. State guaranty association coverage limits vary; see State Guaranty Associations.
| Risk / Factor | Meaning | Mitigation |
|---|---|---|
| Interest Rate Risk | Rates may rise after you lock in | Ladder; choose suitable term length |
| Inflation Risk | Fixed rate may lag high inflation | Pair with growth-oriented assets |
| Surrender Charges | Costs on excess early withdrawals | Align term with liquidity needs |
| MVA (if present) | Adjusts value on early surrender | Understand formula; avoid early exits. Learn more about MVA. |
| Insurer Credit Quality | Claims-paying ability risk | Review ratings, diversify carriers. See Annuity Company Ratings. |
| Opportunity Cost | Other assets might outperform | Define “safe money” role clearly |
See also: Annuity Company Ratings
Best practice: Calendar a reminder 30–60 days before maturity.
Not FDIC insured. Backed by the issuing insurer’s claims-paying ability. State guaranty associations provide limited protections—consult state resources. Learn more: State Guaranty Associations.
Yes. The benefit then is the guaranteed rate and contract design, not added tax deferral.
Many allow 5–10% of prior anniversary value or accumulated interest. Contract terms vary.
Excess withdrawals may trigger surrender charges + MVA if applicable. Consider a ladder for flexibility.
No. The contractual MYGA rate is fixed for the entire guarantee period; a new rate applies only after renewal.
Withdrawals follow Last-In, First-Out (LIFO): taxable gain is distributed first as ordinary income.
Depends on goals. MYGA = certainty. Indexed annuity = potential for higher credited interest but variable outcomes.
Disclosure: This material is educational and not individualized tax, legal, or investment advice. Product availability, features, and rates are subject to change. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurer. Withdrawals of taxable amounts are subject to ordinary income tax, and if taken before age 59½ (in non-exempt situations) may be subject to a 10% additional tax. State guaranty association coverage limits vary and are not a substitute for due diligence. Always consult your tax or financial professional before purchasing or exchanging an annuity.
