Glossary
Multi-year guaranteed annuity (MYGA)
A fixed deferred annuity that locks in one interest rate for a set term, often three to 10 years, much like a bank CD but issued by an insurer.
Also called: MYGA, multi-year guarantee annuity, CD-type annuity, fixed-rate annuity
A multi-year guaranteed annuity (MYGA) is a fixed deferred annuity that pays one guaranteed interest rate for the entire guarantee period. Unlike some traditional fixed annuities, which guarantee a rate for only the first year, a MYGA locks in the same rate for the whole term, commonly three, five, seven or 10 years. The surrender period usually matches the guarantee period.
Say, hypothetically, you put $100,000 into a five-year MYGA at 5% compounded annually and withdraw nothing: the value at the end of year five is about $127,600. Interest grows tax-deferred until withdrawn, gains are taxed as ordinary income, and withdrawals before age 59½ may face a 10% IRS penalty. At the end of the term you can usually renew, move the money through a 1035 exchange, annuitize or cash out during a short window.
MYGAs are often compared with CDs, but they aren't FDIC-insured. Protection depends on the insurer's financial strength and, up to limits, the state guaranty association. Early withdrawals beyond the free amount trigger surrender charges and sometimes a market value adjustment. New-contract rates move with bond yields. See multi-year guaranteed annuities and how annuity rates are set and why they move.
Last reviewed October 4, 2026