Multi-Year Guaranteed Annuity (MYGA)

What Is a MYGA?

MYGAs are contracts with insurance companies. You deposit a lump sum, and in return, the insurer guarantees a fixed interest rate for the entire term of your contract. Unlike certificates of deposit (CDs), your growth is tax-deferred, which means you do not pay taxes until you withdraw.

MYGAs At a Glance

• Guarantee period:  3 to 10 years
• Risk level: Low; not tied to the market
• Taxes: Deferred until withdrawal
• Best for: Near-retirees seeking predictable growth

How Do MYGAs Work?

You contribute a lump sum, and during the accumulation phase, your money grows at the agreed-upon fixed rate. Once your contract matures, you decide whether to take your funds, roll into another contract or even exchange into a new annuity — all with the benefit of tax deferral.

Think of it like this: You are setting money aside for a set number of years, knowing exactly what return you will get at the end. Unlike the stock market, there is no guesswork — your growth is guaranteed.

Linda, 60, put $100,000 into a 5-year MYGA at 6%. At the end of her contract, she had the option to withdraw her funds with interest, roll into an

MYGAs vs. CDs

People often compare MYGAs to CDs because both are largely considered safe money products.

The key difference is in how your growth is taxed and how your funds are protected. CDs are insured by the FDIC but taxed annually, while MYGAs are backed by state guaranty associations and offer tax-deferred growth.

For many retirees, that tax benefit alone can make MYGAs more appealing.

Comparison Table

Feature	MYGA	CD
Issuer	Insurance company	Bank
Rate Guarantee	3 to 10 years	Until maturity
Tax Treatment	Tax-deferred	Interest taxed annually
Liquidity	Limited withdrawals, possible 10% penalty-free	Early withdrawal penalties
Protection	State guaranty association	FDIC insurance

Compare and Explore MYGA

Because MYGA rates vary by provider and by contract length, the best way to ensure the best value is to compare multiple options. Rates also change with market conditions, so it is wise to review today’s offerings before committing.

Annuity.org helps you see current MYGA rates, run calculations and connect with a licensed annuity specialist who can answer your questions without sales pressure.

Today’s Best MYGA Rates

Term	Rate	Provider	Product	AM Best Rating
1 Year	6.33%	Corebridge Financial	American Pathway Fixed 7 Annuity	A
2 Years	5.50%	Axonic Insurance Services	Skyline MYGA	A-
3 Years	6.00%	Mountain Life Insurance Company	Alpine Horizon	B+
4 Years	6.05%	Mountain Life Insurance Company	Alpine Horizon	B+
5 Years	6.45%	Atlantic Coast Life	Safe Harbor Bonus Guarantee	B+
6 Years	6.67%	Atlantic Coast Life	Safe Harbor Bonus Guarantee	B+
7 Years	6.90%	Atlantic Coast Life	Safe Harbor Bonus Guarantee	B+
8 Years	6.00%	Mountain Life Insurance Company	Secure Summit	B+
9 Years	5.40%	Mountain Life Insurance Company	Secure Summit	B+
10 Years	7.65%	Atlantic Coast Life	Safe Harbor Bonus Guarantee	B+

Withdrawals and Taxes on MYGAs

MYGAs let your money grow tax-deferred, but you may still have limited access along the way. Many contracts allow penalty-free withdrawals of up to 10% per year, and some offer exceptions for emergencies like hospital bills.

The tax advantage comes from deferring income tax until you take money out. This allows your balance to compound, similar to an IRA, but without contribution limits.

• If you purchase a MYGA with qualified funds, such as 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 non-qualified funds, the amount you pay in taxes depends on factors like your principal investment, interest earnings, annuity term length and life expectancy. This is called an exclusion ratio.

Your contract spells out exact withdrawal rules and tax treatment, so be sure to carefully review before you commit.

MYGAs vs. Traditional Fixed Annuities

MYGAs are a type of fixed annuity. The main difference between traditional fixed annuities and MYGAs is how long the contracts guarantee the fixed interest rate.

MYGAs guarantee the interest rate for the entire duration of the contract (for example, 10 years). Traditional fixed annuities typically guarantee the interest rate only for a portion of the contract term. So, you may buy a traditional fixed annuity with a seven-year term, but the rate may be guaranteed only for the first three years.

“Many of my clients seeking short-term investments are purchasing MYGA, especially in the three- to five-year time frame. They can defer their taxes while still employed and not in need of additional taxable income. Given the current high interest rates, MYGA has become a significant component of retirement financial planning. With the likelihood of interest rate decreases, the fixed-rate nature of MYGA for a set number of years is highly appealing to my clients.”

Aamir M. Chalisa, MBA, LUTCF, MDRTGeneral Manager at Futurity First Insurance Group

Aamir M. Chalisa is the GM at Futurity First, leading Oak Brook’s top branch. With 30+ years’ expertise, chairs GAMA Global, driving diversity worldwide.

Is a MYGA Right for You?

Not everyone needs or benefits from a MYGA, but for many nearing retirement, it provides exactly the right mix of growth and safety. 

If you want your savings to work harder than in a savings account but do not want to take on market risk, a MYGA may be a smart choice. On the other hand, if you are younger and focused on long-term growth or outpacing inflation, you may want to look at other products.

Q: I want safe growth for the next five years until I retire. Is a MYGA a good fit?
A: Yes. MYGAs are designed for stability over defined terms, giving you guaranteed growth without market risk.

Q: I’m 45 and looking for long-term returns. Should I buy a MYGA?
A: Probably not — MYGAs trade higher growth potential for predictability and secu