MYGA Rates Explained: How to Lock in the Best Fixed Annuity Guarantees

When it comes to retirement, guarantees matter. And when it comes to guarantees, Multi-Year Guarantee Annuities (MYGAs) are one of the cleanest, most straightforward contracts you’ll ever see.

But if you’ve been Googling “MYGA rates,” you’ve probably run into a wall of confusing charts, slick sales language, and promises that sound too good to be true. That ends here. I’m going to shoot it straight, in plain English, so you know exactly what MYGAs are, how MYGA rates work, and how to make sure you’re getting the highest contractual guarantee available.

What Is a MYGA?

A MYGA is the annuity industry’s version of a certificate of deposit (CD). The mechanics are simple:

• Issued by life insurance companies. Not banks, not Wall Street.
• Pays a fixed interest rate for a set number of years (typically 2–10).
• Principal protection. At the end of the term, you still have your original money.
• Tax deferral. In non-IRA accounts, the interest compounds tax-deferred until you withdraw.

That’s it. No market exposure. No moving parts. No “might do” illustrations. Just a contractual guarantee, signed by the insurance company, for the duration you choose.

MYGAs vs. CDs vs. Treasuries

People often ask: Should I buy a CD, a Treasury, or a MYGA? Here’s the breakdown:

• CDs are issued by banks. Interest is taxable annually in non-IRA accounts. FDIC-insured up to $250,000.
• Treasuries are backed by the U.S. government. Interest is state-tax free but still taxable federally.
• MYGAs are issued by insurance companies. Interest compounds tax-deferred in non-IRA accounts until you withdraw.

The Rule of Thumb

• If your duration is 3 years or less, CDs and Treasuries may be the better fit.
• If your duration is 4–10 years, MYGAs usually provide the highest contractual guarantees.

MYGA Rates

The higher the MYGA rate, the more guaranteed growth you’ll earn without ever touching your principal.

For example:

• $500,000 in a 5-year MYGA at 5% = $25,000 a year in interest.
• After five years, you still have your original $500,000 intact.

That’s what I mean when I say you can “peel off the interest” and never touch the principal.

How to Shop for the Best MYGA Rates

Here’s the no-BS truth: MYGA rates change all the time.

The only way to make sure you’re locking in the best rate is to:

• Compare every carrier.
• Compare every duration.
• Compare options state by state (rates are filed by state).

Most advisors won’t do this because they only represent a handful of companies. That’s why we built The Annuity Man with real-time MYGA quotes available 24/7/365. You see the same data we see with no smoke, no mirrors, just the top contractual guarantees in the country.

Common Misconceptions About MYGAs

1. “They have hidden fees.”
   1. False. MYGAs don’t have annual fees. The insurance company makes money on the spread, not by charging you.
2. “I’ll lose access to my money.”
   1. Not true. You can structure withdrawals. Most MYGAs allow you to take out annual interest penalty-free. And at the end of the term, you get 100% of your principal back.
3. “MYGAs are risky because they’re not FDIC insured.”
   1. MYGAs are backed by the financial strength of the issuing insurance company and supported by state guaranty associations (rules vary by state). It’s not FDIC, but it’s not the Wild West either.

FAQs About MYGA Rates

Q: What happens if MYGA rates go down in the future?

A: If rates drop, you’ll be glad you locked in a higher rate. That’s the beauty of a multi-year guarantee.

Q: What if MYGA rates go up after I buy?

A: That’s the tradeoff. You won’t participate in higher future rates until your term ends. That’s why some clients ladder MYGAs—buying multiple contracts with staggered end dates.

Q: Are MYGAs good inside IRAs?

A: Yes, but the tax deferral benefit doesn’t matter inside an IRA (because IRAs are already tax-deferred). In IRAs, the value is purely the rate guarantee.

Q: Can I lose money in a MYGA?

A: No. As long as you don’t surrender early with penalties, your principal is protected by contract.

When a MYGA Makes Sense

MYGAs are best when you want:

• Principal protection without volatility.
• Guaranteed growth over a fixed period.
• Supplemental income (peeling off interest for spending money).
• A safe place to park money during uncertain market conditions.

If you’re looking for equity-like returns, don’t buy a MYGA. If you want contractual guarantees, it’s a fit.

The P.I.L.L. Framework

Every annuity solves for one or more of four things:

1. Principal Protection
2. Income for Life
3. Legacy
4. Long-Term Care/Confinement Care

MYGAs solve for Principal Protection. That’s it. Keep it simple.

Final Thoughts

If you’re searching for the best MYGA rates, don’t get distracted by hype or sales pitches. Look at the contract. Look at the guarantee.

The right MYGA should:

• Protect your principal.
• Guarantee a fixed rate for the duration you choose.
• Fit into your overall retirement plan without exposing your money to market risk.

No fluff. No games. Just contractual guarantees you can count on.

If you want the truth about MYGA rates, it comes down to locking in the highest contractual guarantee available and then letting that contract do its job.