MYGAs, The CD Alternative
MYGA stands for Multi-Year Guaranteed Annuity.
A MYGA works almost exactly like a CD at your bank, with three important differences.
One. The interest rate is usually higher. As of 2026, a 5-year MYGA from a top-rated carrier is paying around 5.2%. A comparable 5-year CD at a bank is paying around 4.4%. On $100,000, over five years, that difference is roughly $4,000.
Two. The interest is tax-deferred. In a CD, you pay taxes on the interest every year even if you don't touch it. In a MYGA, you don't pay taxes on the interest until you take the money out. That means your money is compounding on itself and on the money that would have gone to taxes.
Three. You get a 10% annual free withdrawal. Every year during the surrender period, you can take out up to 10% of the account balance without penalty. CDs do not offer this. If you break a CD early, the whole thing gets penalized.
The trade-off is the surrender period. If you cash out the entire MYGA in year two, you pay a surrender charge that starts around 9% and declines each year.
Who a MYGA is right for:
Someone with money sitting in a CD, money market, or savings account earning less than they could Someone age 55 or older who wants safe, predictable growth for a fixed period Someone who doesn't need the whole balance available all at once, but wants access to some of it Someone who wants to defer taxes on interest until later
Someone who values simplicity, no market exposure, no moving parts Who a MYGA is wrong for:
Someone who might need 100% of the money in year two Someone under 55 whose money should probably be growing more aggressively Someone who wants monthly income right now (a SPIA is better for that) Someone who wants exposure to market upside A MYGA is the closest thing to a boring, honest annuity. Nobody makes a giant commission on these. There is no complicated math. It is a fixed rate, for a fixed period, with a small penalty if you break it early. If someone is trying to talk you out of a MYGA and into something more complicated, ask why.