Multi Year Guaranteed Annuity the Ultimate CD Alternative

Banking and savings

What is a Multi Year Guaranteed Annuity?

A Multi-Year Guarantee Annuity (MYGA) is a type of fixed annuity that pays a guaranteed interest rate for a set number of years (usually 2 to 10 years) and typically allows you to withdraw your interest monthly. Essentially a multi-year guaranteed annuity is a CD that is issued by an insurance company rather than a bank. 

For this reason, MYGA’s are often referred to as a CD Type Annuity.

Because current CD rates are at all-time lows, multi-year guaranteed annuities have become popular among conservative investors looking for a safe and steady way to grow their retirement savings.

Key Features of a Multi Year Guaranteed Annuity

  • Safety of principal
  • Guaranteed growth
  • Guaranteed retirement income
  • Leave a legacy
  • Access to your money

Multi Year Guaranteed Annuity (MYGA) vs CD

MYGAs work very much like a certificate of deposit (CD). Both a fixed annuity and a CD provide principal protection, meaning your account value will not decrease due to market performance.

A fixed annuity, or MYGA, guarantees a set interest rate for a specified period of time – just like a CD. However, Fixed annuity guarantees are backed by the claims-paying ability of the issuing insurance company and are not insured by the FDIC like a CD.

You can view your state’s guarantee association’s annuity coverage limit by visit our State Guaranty Associations page. The associations provide a safety net for their state’s annuity owners and guarantee policyholders continue to receive coverage.

Multi Year Guaranteed Annuity Rates September

A multi-year guaranteed annuity, or MYGA, is a type of fixed annuity that offers a guaranteed fixed interest rate for a certain period, usually 2-10 years. An MYGA is appropriate for someone who is closer to retirement and prefers tax deferral and a guarantee of investment return.

Below is a chart that shows our best MYGA rates by the term today. If you would like to shop and compare more MYGA annuities you can do so at our virtual MYGA Marketplace.

Atlantic Coast LifeSafe Harbor (Most States)10 Yrs3.25%B++
Security Sentinel LifePersonal Choice7 Yrs 3.10%B++
Atlantic Coast LifeSafe Haven (Most States)6 Yrs3.07%B++
Atlantic Coast LifeSafe Harbor (Most States)5 Yrs3.15%B++
Liberty Bankers LifeBankers Elite 9 (NO W/D)9 Yrs3.00%A
Guaranty Income Life Rate Lock 9 - $250K+9 Yrs3.00%B++
SILAC Insurance CoSecure Savings Elite 55 Yrs2.95%B+
Liberty Bankers LifeBankers Elite 7 (NO W/D)7 Yrs2.90%A
Guaranty Income Life Rate Lock 9 9 Yrs2.90%B++
SILAC Insurance CoSecure Savings Elite 55 Yrs2.80%B+
Fidelity and Guaranty FG Guarantee Platinum 77 Yrs2.80%A-, S&P A-
Liberty Bankers LifeBankers Elite 5 (NO W/D)5 Years2.75%A-
Guaranty Income Life Rate Lock 8 $250K8 Years2.75%B
SILAC Insurance CoSecure Savings Elite 55 Years2.70%B+
Fidelity and Guaranty FG Guarantee Platinum 55 Years2.65%A-
Guaranty Income Life Rate Lock 88 Years2.65%B++
OceanviewOceanview Harbourview 4 Year 4 Years2.60%A-
SagicorMilestone MYGA 7 $100K+7 Years2.60%A
SagicorMilestone MYGA 5 $100K+5 Years2.50%A-
SagicorMilestone MYGA 6 $100K6 Years2.50%A
American LifePlan Gap5 Years2.45%B++
American NationalPalladium MYG 6yr $250K+6 Years2.45%A , S&P A
American NationalPalladium MYG -7yr $250K+7 Years2.45%A , S&P A
SagicorMilestone MYGA $50K+7 Years2.40%A
OceanviewOceanview Harbourview 3 Year MYGA3 Years2.35%A-
SagicorMilestone MYGA 6 > $50K6 Years2.35%A
American NationalPalladium MYG 6yr $100K+6 Years2.30%A , S&P A
American NationalPalladium MYG -7yr $100K+7 Years2.30%A , S&P A
American LifeAmerican Classic 33 Years2.25%B
Reliance StandardEleos MVA5 Years2.25%A , S&P A
United of OmahaUltra-Premier 77 Years2.25%A+, S&P A+
Delaware LifePinnacle 77 Years2.25%A , S&P BBB
American NationalPalladium MYG 6yr < $100K6 Years2.20%A , S&P A
American National Palladium MYG 7yr < $100K7 Years2.20%A , S&P A
SILAC Insurance CoSecure Savings Elite 22 Years2.15%B+
American NationalPalladium MYG -5yr $250K+5 Years2.15%A , S&P A
StandardFocused Growth 7 $100K+7 Years2.15%A, S&P A+
Liberty Bankers LifeBankers Elite 3 (NO W/D)3 Years2.10%A
SagicorMilestone MYGA 4 >$100K4 Years2.10%A
Reliance StandardEleos-SP5 Years2.10%A++, S&P A+
SagicorMilestone MYGA 5 < $50K5 Years2.10%A
SagicorMilestone MYGA 3 - $100K+3 Years2.05%A-
StandardFocused Growth 5 $100K+5 Years2.05%A, S&P A
Standard Focused Growth 7 < $100K7 Years2.05%A, S&P A
American NationalPalladium MYG 3yr 250K+3 Years2.00%A, S&P A
United of OmahaUltra Premier 55 Years2.00%A , S&P A
Delaware LifePinnacle 55 Years2.00%A-, S&P BBB+
American Equity GuaranteeShield 55 Years2.00%A , S&P A
Fidelity and Guaranty FG Guarantee Platinum 33 Years1.95%A-, S&P A-
StandardFocused Growth 5 <$100K5 Years1.95%A, S&P A+
American NationalPalladium MYG 5yr $100K+5 Years1.90%A , S&P A
SagicorMilestone MYGA 6 <$50K6 Years1.90%A-
SILAC Insurance CoSecure Savings Elite 22 Years1.85%B+
American NationalPalladium MYG 3yr $100K+3 Years1.85%A, S&P A
SILAC Insurance CoSecure Savings Elite 22 Years1.75%B+
American NationalPalladium MYG 3yr < $100K3 Years1.75%A, S&P A-
American GeneralPathway Vision MYG 4 $100K4 Years1.70%A, S&P A
OceanviewOceanview Harbourview 2 2 Years1.65%A-
SagicorMilestone MYGA 5 - <$50K5 Years1.65%A-
SagicorMilestone MYGA 4 $50K+ 4 Years1.60%A-
SagicorMilestone MYGA 3 $50K+3 Years1.50%A
StandardFocused Growth 3 - $100K+3 Years1.50%A, S&P A+
Delaware LifePinnacle 33 Years1.45%A-, S&P BBB+
American Equity GuaranteeShield 33 Years1.45%A , S&P A
StandardFocused Growth 3 < $100K3 Years1.40%A, S&P A
SagicorMilestone MYGA 3 - <$50K3 Years1.10%A-
SagicorMilestone MYGA 4 < $50K4 Years1.10%A

The Best MYGA Annuity Companies

  1. New York Life
  2. AIG Companies 
  3. Global Atlantic
  4. Massachusetts Mutual 
  5. Pacific Life 
  6. Principal Financial Group
  7. Western & Southern Group 
  8. Symetra Financial
  9. MetLife 
  10. Great American 

Each year the Secure Retirement Institute publishes total U.S. Individual Annuity Sales and breaks out the results for the top 20 Insurance Companies. 

In addition to overall annuity sales, they also break out the results by types of annuities including fixed, indexed, and top variable annuity companies as well.

Fixed annuity sales broke sales records in 2019 with sales of $139.8 billion in 2019, up 5% from the prior year.

The below table lists the top 10 Fixed Annuity Companies based on U.S. Individual Fixed Annuity Sales in 2019. In addition to the total annuity sales for each company, we’ve included their Comdex Score and AM Best Rating as well.

Insurance CompanyA.M. Best
2019 Fixed
Annuity Sales
New York LifeA++100$9,863,105.00
AIG CompaniesA82$7,237,372.00
Global Atlantic Financial GroupA75$4,684,876.00
Massachusetts Mutual LifeA++98$3,854,866.00
Pacific LifeA+93$2,873,727.00
Principal Financial GroupA91$2,844,881.00
Western Southern GroupA+96$2,468,257.00
Symetra FinancialA82$2,103,435.00
Great AmericanA82$1,403,162.00

How is a Multi Year Guaranteed Annuity Taxed?

A MYGA offers tax deferral of interest that is compounded on an annual basis. This can create additional wealth exponentially because the tax occurs only when you take the money out. It’s like investing in an IRA or 401(k) but without the contribution limits.

The tax rules change slightly depending on whether the funds are qualified or non-qualified. If you purchase a MYGA with qualified funds, such through an IRA or other tax-advantaged account, you pay income tax on the principal and interest when you take out money. If you purchase a MYGA with nonqualified funds, you pay taxes only on the interest.

This tax benefit is not unique to MYGAs. It exists with traditional fixed annuities as well.

Multi Year Guaranteed Annuity Pros and Cons

MYGA Advantages

A multi-year guaranteed annuity, or MYGA, is a type of fixed annuity that offers a guaranteed fixed annuity rate for a certain period, usually from 2 to 10 years. A MYGA is appropriate for someone who is closer to retirement and prefers tax deferral and a guarantee of investment return.

  • MYGAs Provide a Guaranteed Rate of Return
  • A MYGA Grows Tax-Deferred
  • MYGAs Protect Your Principal From Loss
  • Most MYGAs Provide Some Liquidity
  • A Multi-Year Guaranteed Annuity is the Simplest of any Annuity Product

MYGA Disadvantages

  • 10% IRS Penalty on Withdrawals from a Fixed Annuity Made Before Age 59½
  • A Fixed Rate Annuity Offers Few Income Options

MYGA Annuity Income Options

An MYGA is usually purchased because it offers higher interest rates than other available investment options. However, all annuities must have the option to be converted into a lifetime income stream.  

All multi-year guaranteed annuities have annuitization rates built into the contract. This means you have the right to turn your annuity contract into a guaranteed income stream that will last for the rest of your life.

Since MYGAs are designed to pay out the best annual interest rate they are not ideal as an income investment. If you own a multi-year guaranteed annuity and want to begin lifetime income payments you are almost always better of to transfer to an immediate annuity or deferred annuity with an income rider.

Using a tax-free 1035 exchange you are able to transfer an existing MYGA to an income annuity without incurring any tax ramifications.

Receive Annuity Income Payments for a set number of years

You receive annuity income payments for a fixed period that you select, usually 10 to 20 years.

Receive Payments for Life and a Minimum Amount of Years

You receive income payments for life. If you select a minimum fixed period and die before the end of the period, the remaining income benefit payments are paid to the person you designate.

For Your Lifetime and then a 50% Reduced Income Amount for Spouses Lifetime

Income benefit payments are guaranteed for your life and the life of a designated joint annuitant. If you are survived by the joint annuitant, he or she will receive 50% of the income benefit payment for life.

Multi Year Guarantee Annuity (MYGA) Guide

Multi year guaranteed annuities are the most simple annuity product which also makes them the easiest to shop for.  Below are a few features to consider when comparing current annuity rates using our online annuity database.

Length of Annuity Contract: Typically, a longer MYGA contract will pay you a higher guaranteed interest rate. However, that is not always the case in today’s low-rate environment.

Access to Your Money during Annuity Contract: Most all fixed annuities have some type of annual free withdrawals, but the amount available varies by product. You’ll see most of the fixed annuities at our marketplace provide either:

    • Interest-only withdrawals annually, or
    • 10% Free Withdrawals (10% of the previous years’ account value) annually.

The Annuity Company’s Financial Rating: Annuity companies receive financial ratings from independent rating agencies. These ratings are very important to consider because they are an indicator of its ability to fulfill financial commitments. Most often a lower-rated annuity company will offer multi-year guaranteed annuities with higher interest rates.

Our annuity rate tables only list the AM Best Rating however if you click on the name of an insurer you’ll be directed to its Profile Page where all ratings will be listed.

Multi Year Guarantee Annuity FAQs

Yes. Insurance companies as a whole have a long history of stability, even through our nation’s most difficult economic times. MYGAs, unlike variable annuities, are backed by the full faith and credit of the issuing insurance company.

A CD-type annuity is an industry coined term to describe a multi-year guarantee annuity. The interest rate is guaranteed in advance for a set number of years, similar to a bank CD.

In the broadest terms, an annuity is a contract between you and an insurance company, where you make a premium payment(s) in exchange for the benefits defined in the contract.

With fixed annuities, there are no fees, upfront loads or sales charges. 100% of your money goes into your contract without any expense to you. The only time you might experience a fee, is if you choose to add an optional rider that comes with a cost.

If you are considering a multi-year guaranteed annuity you can access current MYGA Annuity Rates rates at our online annuity marketplace.

Leave a Reply

Related Reading

Free Annuity Quote

Receive a personalized annuity quote within 4 business hours.