What Is a MYGA? Everything You Need to Know About Multi-Year Guarantee Annuities

A Multi-Year Guarantee Annuity, or MYGA, is one of the simplest, most transparent annuity types available. It’s the annuity industry’s version of a certificate of deposit (CD), but with one major advantage: tax-deferred growth in non-IRA accounts.

If you’re looking for guaranteed interest without the noise of market volatility, MYGAs deserve a serious look.

What Is a MYGA?

A MYGA is a Fixed Annuity that provides a guaranteed interest rate for a period you choose. Typically, between 2 and 10 years.

• No market risk
• No moving parts
• Just a locked-in rate

Think of it like a CD, but instead of FDIC insurance, a MYGA is backed by the claims-paying ability of the issuing insurance company. That’s why it's critical to work with carriers that are financially strong and highly rated.

MYGA vs. CD: The Key Difference

While both offer guaranteed returns, there’s one big distinction:

• CDs: Interest is taxed annually in non-IRA accounts
• MYGAs: Interest grows tax-deferred, so you don’t pay taxes until you access the money

That’s why many choose MYGAs over CDs, especially if they don’t need to touch the interest until retirement.

What's the Best Duration for a MYGA?

The sweet spot for locking in a MYGA rate is typically five years.

While you can find longer durations (up to 10 years) and shorter ones (as low as 2 years), most carriers do not reward buyers for locking money up for longer than five years. And if you’re building a MYGA ladder, mixing 3, 4, 5, and even 7-year terms can help stagger your rate maturities effectively.

If you’re buying one MYGA, however, 5 years is generally the most efficient term right now.

What About Surrender Charges?

This is where many people misunderstand MYGAs.

• A 5-year MYGA might have declining surrender charges like 9%, 8%, 7%, 6%, 5%
• These penalties apply if you try to pull out money early
• Why? Because the insurer locked in your rate and doesn't want you to walk away mid-contract

Some carriers also auto-renew the contract term and surrender schedule unless you notify them. Others may simply adjust to a lower declared rate without penalties.

Moral of the story: You need to know what you're buying and who you’re buying from.

Locking In Your MYGA Rate

MYGA rates change frequently, and insurance companies don’t provide advance notice.

If you see a rate you like, the only way to lock it in is by completing an application. Once the carrier issues a policy number, your rate is secured. Then, you’ll have a short window to fund the contract.

What Happens After You Buy?

• You’ll typically receive a physical policy (digital available upon request)
• The Annuity Man team will review the policy before sending it to you
• Once you have it, a free-look period begins giving you the right to cancel for a full refund if you change your mind (state laws vary)

This feature protects you if your situation changes suddenly after purchase, and it's one of the most consumer-friendly benefits in the annuity world.

Where to Shop for MYGAs?

What is the best place to compare MYGA rates? The Annuity Man

• See real-time rates based on your state and desired term
• Representing nearly every competitive carrier in the MYGA space

When you’re ready to talk, you can book a call and go over everything with Stan directly.

MYGA Simplicity Wins

If you want guaranteed growth without market risk, tax-deferred interest, and zero complexity, MYGAs deliver.

But as with any fixed product, it pays to understand:

• The surrender schedule
• The free-look window
• What happens at the end of the term

Work with someone who will explain the contract before and after you buy. And remember, it’s not just about rate; it’s about understanding what you’re locking into.