What Is a Multi-Year Guaranteed Annuity (MYGA)?

MYGA: The CD Alternative for Retirees

A Multi-Year Guaranteed Annuity (MYGA) is one of the simplest annuity products available. It pays a fixed, guaranteed interest rate for a set number of years — essentially a tax-deferred CD issued by an insurance company.

How MYGAs Work

• You deposit a lump sum (typically $10,000 minimum)
• The insurer guarantees a fixed rate for the term (e.g., 3, 5, 7, or 10 years)
• Interest grows tax-deferred
• At the end of the term, you can renew, withdraw, or transfer to another product
• No annual fees

MYGA vs. CD Comparison

Feature	MYGA	Bank CD
Tax treatment	Tax-deferred	Taxable annually
FDIC insured	No (state guaranty)	Yes ($250k)
Typical rates	Often 0.25–0.5% higher	Benchmark rate
Early withdrawal	Surrender charge	Interest penalty
10% free withdrawal	Usually yes	No

2024 MYGA Rates

In the current rate environment, MYGAs are competitive. Typical 5-year MYGA rates from highly-rated carriers range from 4.5%–5.5%, often beating bank CDs with the added benefit of tax deferral.

Who Should Consider a MYGA?

• Retirees with CDs maturing who want higher, tax-deferred rates
• Those who don’t need immediate income but want safe, guaranteed growth
• People in high tax brackets who benefit significantly from tax deferral
• Anyone who wants to park money safely for 3–7 years

What Happens at Maturity?

At the end of the term, you typically have a 30-day window (sometimes longer) to withdraw without surrender charges, renew at the new rate, or exchange to another annuity product via 1035 exchange.