A tax-deferred CD-style contract: a guaranteed interest rate for a set number of years.
An accumulation product. The insurer guarantees a fixed interest rate for a term (commonly 2–10 years). It behaves much like a bank CD, but grows tax-deferred and is backed by the insurer (and state guaranty association) rather than the FDIC.
You are locked in. If rates rise after you buy, you are stuck at the old rate or must pay a surrender charge to leave. And unlike a CD, it is backed by the insurer's solvency and the state guaranty association, not the FDIC.
A flat guaranteed yield. In the 2026 environment, multi-year fixed rates have commonly run in the ~5% range for mid-length terms — but rates move with the bond market.
No annual fee on most MYGAs. The cost is the surrender charge if you leave early, plus the opportunity cost if rates rise after you lock in.
Limited during the term. Most allow ~10%/year penalty-free withdrawals; beyond that a surrender charge applies, typically declining over the term.
Growth is tax-deferred; you owe ordinary income tax on the gains when withdrawn. Withdrawals before 59½ may face a 10% IRS penalty on the gain.
Educational explainer, not individualized financial advice. Figures are typical industry ranges as of 2026 and vary by insurer, product, and state. Sources: SEC/FINRA investor bulletins, IRS Pub 575/939, NAIC model regulations, SECURE 2.0 Act. We’re independent and don’t sell annuities.