The basics
What is a MYGA?
A Multi-Year Guaranteed Annuity (MYGA) is a fixed annuity that credits a guaranteed interest rate for a set number of years. In practice it works much like a bank CD — but it is an insurance product, not a bank product, and that distinction matters.
- Offers a guaranteed rate for a stated guarantee period.
- Principal is protected by the claims-paying ability of the issuing insurance carrier.
- Interest grows tax-deferred until withdrawn.
- There are usually surrender charges during the guarantee period.
- Some MYGAs allow interest withdrawals or penalty-free withdrawals, depending on the carrier and product.
How it flows
From premium to access.
Client deposits premiuminto the MYGA contract
Carrier guarantees a ratefor the chosen term
Interest compoundstax-deferred
Client accesses fundsper contract terms
Side by side
MYGA vs. CD
They can look similar at a glance. They are not the same.
| Feature | MYGA | CD |
|---|---|---|
| Issuer | Insurance carrier | Bank |
| Rate guarantee | Fixed for the guarantee period | Fixed for the CD term |
| Tax treatment | Tax-deferred until withdrawn | Interest generally taxed annually |
| Principal protection | Backed by the carrier's claims-paying ability | FDIC insured within applicable limits |
| Liquidity | Penalty-free withdrawal provisions may apply, depending on product | Early withdrawal typically triggers a penalty |
| Surrender period / term | Surrender schedule over the guarantee period | Set CD term |
| Best use case | Tax-deferred, guaranteed growth outside a bank | Short-term guaranteed savings at a bank |
Positioning tip
When a client says “why not just use a CD?”, the cleanest answer usually centers on tax deferral and the guarantee structure — not on chasing a headline rate.
For educational and financial-professional use only. This is not legal, tax, investment, or compliance advice. MYGA features, rates, surrender schedules, and withdrawal provisions vary by carrier, state, and contract and are subject to change. Guarantees are based on the claims-paying ability of the issuing insurance carrier. FDIC insurance applies to bank products only.
Have a MYGA case on the table?
Request the current rate sheet and we will send options that fit the surrender period and funding type.