Annuity Lesson #14
Multi-Year Guaranteed Annuity (MYGA) Guide for 2025
Jeremiah Konger
CEO
"The lower withdrawal rate from investments that corresponds to using an annuity with level payments can help assets to grow and to better manage risks related to market volatility.."
A multi-year guaranteed annuity (MYGA) is a financial product that provides a guaranteed fixed interest rate on your principal balance for a fixed period of time. The contract term ranges anywhere between 3 and 10 years.
Pre-retirees often consider this investment because it is one of the low-risk options to create additional savings for retirement.
Choosing a MYGA fixed annuity involves a few steps, and researching the best interest rates is one of them. This article will tell everything you need to know about MYGAs and how to find the best offer on the market.
💬 Highlights
- A Multi-Year Guaranteed Annuity (MYGA) offers a fixed interest rate for 3–10 years, providing predictable, low-risk growth.
- MYGAs grow tax-deferred, meaning you only pay taxes when you withdraw funds, unlike CDs or bonds, which are taxed annually.
- Principal is protected in a MYGA, shielding your investment from market losses common with stocks and bonds.
- While MYGAs offer guaranteed growth, liquidity is limited, with early withdrawals subject to surrender charges.
- MYGAs are ideal for retirees or pre-retirees seeking safe, predictable income and a reliable way to diversify retirement savings.
What Is a Multi-Year Guaranteed Annuity?
🔎 A multi-year guaranteed annuity is a type of fixed annuity that offers a fixed rate to grow your contribution for 3 to 10 years.
What sets this annuity apart from other annuities is that the interest rate doesn’t fluctuate throughout the entire contracted term. Hence, it is often considered a low-risk and predictable investment.
To give you an example of how MYGAs work, let’s look at fixed and variable types of annuities:
A fixed annuity may offer a certain interest rate, but only for a few years of your contracted term.
A variable annuity is closely linked to the market performance, and its interest rate may increase or decrease over time.
A multi-year guaranteed annuity, on the other hand, offers an interest rate that remains the same till the end of the term.
What these annuities have in common is that they offer tax-deferred growth, lifetime income riders, and are designed for retirement savings.
Today’s Best MYGA Rates
🔢 Among numerous MYGA annuities, finding the right one is challenging. If it is the profit you’re after, here are the best MYGA annuity rates:
| Term Length | Fixed Rate | Provider | Product | Insurer Rating |
|---|---|---|---|---|
| 1 Year | 6.43% | Corebridge Financial | American Pathway Fixed 7 Annuity | A |
| 2 Year | 5.50% | Oceanview Life and Annuity Company | Harbourview MYGA 2 | A |
| 3 Year | 6.10% | Wichita National Life Insurance | Security 3 MYGA | B+ |
| 4 Year | 5.30% | Americo | Platinum Assure Series 4 | A |
| 5 Year | 6.45% | Atlantic Coast Life | Safe Harbor Bonus Guarantee | B+ |
| 6 Year | 6.67% | Atlantic Coast Life | Safe Harbor Bonus Guarantee | B+ |
| 7 Year | 6.90% | Atlantic Coast Life | Safe Harbor Bonus Guarantee | B+ |
| 8 Year | 6.00% | Mountain Life Insurance Company | Secure Summit | B+ |
| 9 Year | 5.40% | Mountain Life Insurance Company | Secure Summit | B+ |
| 10 Year | 7.65% | Atlantic Coast Life | Safe Harbor Bonus Guarantee | B+ |
Key Features & Benefits
Purchasing a MYGA fixed annuity bears many benefits, especially for pre-retirees who are looking for a low-risk and predictable investment to diversify their portfolios.
Low Risk
As MYGAs offer a rate guarantee for the whole contract term, they come with much safer terms for investors. For this reason, MYGAs are considered a safer alternative to some other popular options, like variable or indexed annuities.
Principal Protection
Your investment is protected with a MYGA against market losses. With bonds and stocks, a lot depends on market performance. However, with MYGAs, you won’t lose your principal as long as you follow the contract terms.
Predictable Growth
MYGAs are also a guaranteed interest annuity because your rate is locked when you sign the contract. With this, you know exactly how much your money will grow, no matter how the market fluctuates.
Tax Deferral
MYGAs are a tax-deferred annuity type that can grow your savings without annual taxes until you make withdrawals.
Optional Riders
Some MYGA contracts come with additional riders that can provide more security for your peace of mind. These features may include death benefits or long-term care riders.
Potential Drawbacks & Risks
Like any investment, MYGAs do not come without risks, yet it is still one of the safest financial investments on the market.
Here is what you should know about before purchasing this annuity:
MYGAs, similar to other annuities, lack liquidity. Since you sign a long-term contract - for at least a year - you are often limited to only annual 10% penalty-free withdrawals.
Another downside of fixed annuities is that the interest rate may lag behind inflation, which may reduce your purchasing power at the end of the contract term.
How MYGAs Compare to CDs and Bonds
Certificates of Deposit (CDs), bonds, and MYGAs are low- to moderate-risk investments pre-retirees should consider. Each has its benefits and risks and suits a certain type of investor.
Here is how they compare:
Multi-Year Guaranteed Annuity (MYGA) vs. CD
Issuer
CDs, by all means, serve a very similar purpose as MYGAs do. One of the main differences between these products is that the first is offered by financial institutions, like banks and credit unions, whereas to buy a Multi-Year Guaranteed Annuity, you would have to go to an insurance company.
Tax Treatment
MYGAs have a significant advantage over CDs. The interest growth you gain from them can be tax-deferred. You only need to pay taxes on your investment and interest growth after withdrawing them.
In contrast with CDs, your earned interest is taxed every year.
Interest Rates
It’s also worth mentioning that historically MYGAs' interest rates are higher than CDs’. Still, the differences between the two products in this regard are not significant.
Liquidity
And CDs offer less flexibility when it comes to making early withdrawals. In most situations, you won’t be able to withdraw your assets from a CD before its term without paying a penalty.
| Feature | MYGA (Multi-Year Guaranteed Annuity) | CD (Certificate of Deposit) |
|---|---|---|
| Yield | Often higher fixed rates | Typically lower fixed rates |
| Risk | Backed by insurer + state guaranty association | FDIC/NCUA insured up to $250k |
| Liquidity | Limited; surrender charges apply | Limited; early withdrawal penalty |
| Tax Treatment | Tax-deferred until withdrawal | Interest taxed annually |
Multi-Year Guaranteed Annuity (MYGA) vs. Bond
Investment Purpose
MYGAs and bonds are both popular choices for conservative investors, but they work in very different ways.
Bonds can be traded on secondary markets, so you have more flexibility to sell before maturity, though their value can fluctuate with interest rates and credit conditions.
In contrast, a MYGA offers guaranteed growth and principal protection, so you know exactly how much your investment will earn over the contract term. This predictability makes MYGAs particularly appealing for retirees or pre-retirees.
Risk and Returns
While bonds may offer higher potential returns, they come with market and credit risk, and the income you earn is typically taxable each year.
MYGAs, on the other hand, grow tax-deferred, meaning you only pay taxes when you begin withdrawals.
Liquidity
Another difference is liquidity: bonds can be sold at any time, although market conditions may affect their value.
MYGAs, in comparison, restrict early withdrawals and may charge surrender fees if you access funds before the end of the term.
| Feature | MYGA (Multi-Year Guaranteed Annuity) | Bond |
|---|---|---|
| Yield | Guaranteed fixed rate | Varies; may be higher but not guaranteed |
| Risk | Principal protected from market loss | Subject to interest rate and credit risk |
| Liquidity | Limited; surrender charges apply | Can be sold before maturity (may lose value) |
| Tax Treatment | Tax-deferred until withdrawal | Interest usually taxable annually |
Is MYGA Right for You?
If you’re planning for retirement, anyone under 85 can purchase a MYGA, but it’s especially beneficial for those aged 60 and up.
MYGAs offer safe, predictable terms and are a smart way to diversify your retirement income.
Unlike stocks or bonds, MYGAs aren’t exposed to market ups and downs, making them an appealing option for retirees who want to grow their savings steadily without taking on significant risk.
How to Choose the Right MYGA
If you’ve decided to invest in a MYGA, choosing the right one may give you peace of mind in retiring with enough income to support yourself. Here is what Annuity Association always recommends clients:
Step 1: Assess Time Horizon
Determine how long you can leave your money invested. MYGAs work best if you can commit to the full term to maximize guaranteed growth.
Step 2: Check Carrier Ratings
Review the insurance company’s financial strength using ratings from AM Best, Comdex, or similar agencies to ensure reliability and safety.
Step 3: Evaluate Withdrawal Needs
Consider how much access you may need to your funds. Factor in surrender charges, free-withdrawal allowances, and any optional riders that affect liquidity.
Step 4: Consider Minimum Deposit Requirements
Make sure the MYGA’s minimum investment aligns with your budget, as some contracts require several thousand dollars to start.
Step 5: Compare Terms and Features
Look at contract length, guaranteed rates, and optional riders like income guarantees or death benefits to find the best fit for your retirement plan.
Get Your Free MYGA Rate Quote
Planning for a secure and predictable retirement starts with choosing the right investment product. MYGA may be the fixed annuity you need to create an additional income for the future.
The first step is to start your research: compare the best MYGA rates, understand your options, and take the next step towards a more secure retirement.
If you feel stuck or need advice, speak with our expert advisor at Annuity Association or give us a call at (855)-866-3659 to discuss your options today!
FAQs About MYGAs
Are MYGA rates guaranteed for the full term?
Yes. The rate you lock in is fixed and guaranteed for the entire contract length, whether 3, 5, or 10 years.
How often do MYGA rates reset?
Rates only reset when your contract ends. If you renew or purchase a new MYGA, your new rate depends on market conditions at that time.
Is MYGA interest taxable annually?
No. Earnings grow tax-deferred, meaning you only pay taxes when you withdraw funds.
Can I withdraw money early from a MYGA?
Yes, but withdrawals above the contract’s free withdrawal allowance (usually 10% per year) may trigger surrender charges.
Are MYGAs safe?
MYGAs are backed by the issuing insurance company and protected up to certain limits by state guaranty associations, making them a low-risk option.
Annuity Expert
Jeremiah Konger
PS - Here's 3 ways we can help you learn more about annuities.
1. Watch Videos on How to Identify The Highest Paying Protected Income & Growth Annuities.
2. Watch Videos That Reveal What to Look For When Buying A Protected Growth Annuity.
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