MYGA annuities are paying 5.00–5.80% in 2026 — guaranteed, tax-deferred, and principal-protected. This guide explains how MYGAs work, how they compare to CDs, and who should consider one.
A MYGA (Multi-Year Guaranteed Annuity) is a fixed annuity that locks in a guaranteed interest rate for a set term — typically 3 to 10 years — with tax-deferred growth and no market risk. In 2026, top MYGA rates are running 5.00%–5.80% for 5-year terms, outpacing most CDs at comparable maturities while adding tax deferral on earnings. For retirees or near-retirees looking for guaranteed, predictable growth without stock market exposure, MYGAs are one of the most underutilized fixed-income tools available.
| Criteria | Weight | Why It Matters |
|---|---|---|
| Guaranteed Rate Competitiveness | High | Rate determines actual growth — compare to CDs and Treasuries |
| Surrender Charge Period | High | Liquidity restrictions can trap capital if circumstances change |
| Insurance Company Rating | High | A.M. Best A- or better is the minimum acceptable for any annuity |
| Free Withdrawal Provision | Medium | Most MYGAs allow 10% annual penalty-free withdrawals |
| Renewal Terms | Medium | Rate resets at end of term — understand what you're committing to |
Data sources: LIMRA annuity market research, A.M. Best insurer ratings, Wink's Insurance Sales & Market Report (Q1 2026), IRS Publication 575 (annuity taxation), NAIC model regulations.
A Multi-Year Guaranteed Annuity is an insurance contract between you and an insurance company. You deposit a lump sum (typically $10,000 minimum), the insurer guarantees a fixed interest rate for a defined term, and your interest grows tax-deferred. At the end of the term, you can:
The key difference from a CD: MYGA earnings are not taxed annually — they compound tax-deferred until withdrawal. This creates a real advantage for money in taxable accounts, especially for retirees in higher brackets who want to delay income recognition.
| Feature | MYGA (5-Year) | CD (5-Year) |
|---|---|---|
| Typical Rate (May 2026) | 5.00%–5.80% | 4.20%–4.80% |
| Tax Treatment | Tax-deferred | Taxable annually |
| Early Withdrawal | Surrender charge (varies) | Penalty (typically 6 months interest) |
| FDIC Insurance | No (state guaranty funds) | Yes (up to $250K) |
| Required Minimum Distributions | If inside IRA: yes at 73 | If inside IRA: yes at 73 |
| 1035 Exchange | Yes | No |
For a retiree in the 22% federal bracket, a 5.40% MYGA produces more after-tax equivalent yield than a 4.80% CD when the tax deferral benefit is applied — even before considering the rate differential.
Best for: Retirees uncertain about 5–7 year rate environments who want shorter commitment
Typical rate (2026): 4.60%–5.20%
Surrender period: 3 years
A 3-year MYGA locks in a guaranteed rate with a shorter commitment window. If you believe rates will remain elevated or rise further, a 3-year term lets you capture today's rates while retaining the option to renew or reposition sooner. The rate premium on 5-year vs. 3-year MYGAs in 2026 is approximately 40–60 basis points — meaningful but not dramatic.
Retirees 70+ who need potential capital access within 3–5 years, or anyone uncertain about locking funds for longer. Also good as a "ladder rung" in a multi-term MYGA ladder strategy.
Best for: Retirees 60–70 seeking maximum rate without full 7–10 year commitment
Typical rate (2026): 5.00%–5.80%
Surrender period: 5 years (most include 10% annual free withdrawal)
The 5-year MYGA is the most popular term in the current rate environment for good reason — it captures near-peak rates while remaining within most retirees' planning horizon. Top-rated carriers offering 5-year MYGAs at 5.40%+ in May 2026 include Midland National, American Equity, and North American Company (all A-rated by A.M. Best). The 10% annual free withdrawal provision on most contracts means you retain some liquidity if circumstances change. Compare the overall annuity landscape with the fixed index annuity guide to understand how MYGAs fit relative to other annuity types.
Pre-retirees 60–68 and active retirees 68–75 who want to park a portion of fixed-income allocation in guaranteed growth. Ideal for IRA money that isn't needed for 5+ years, where tax deferral is less relevant but guarantee of principal matters.
Best for: Retirees who believe rates will decline over the next 3–5 years
Typical rate (2026): 5.20%–5.65%
Surrender period: 7 years
If you believe the current rate environment is near its peak and rates will fall materially by 2028–2030, a 7-year MYGA locks today's rates through 2033. The rate premium over 5-year terms is smaller than many expect (20–50 bps typically), but the interest rate protection value could be substantial if rates normalize significantly. The 7-year term also maximizes the tax deferral compound effect.
Retirees 60–67 with a clear 7-year horizon for this capital who want to maximize guaranteed growth and hedge against rate declines. Not appropriate for capital that may be needed for long-term care, major purchases, or estate purposes within 7 years.
Best for: IRA holders who want guaranteed growth with no annual tax complexity
Key advantage: Tax deferral already exists inside an IRA — MYGA simplifies required minimum distribution planning
Holding a MYGA inside a Traditional IRA eliminates the tax deferral advantage (IRAs are already tax-deferred), but MYGAs still provide guaranteed rate lock, principal protection, and predictable RMD planning. For retirees at age 73 facing RMDs, knowing exactly what the MYGA will be worth at maturity simplifies planning. Note: MYGA rates inside IRAs are identical to non-qualified rates — there's no premium for qualified money.
IRA holders who want a portion of retirement assets in guaranteed, zero-management fixed growth. Particularly valuable in Roth IRAs where the growth is tax-free.
| Term | Typical Rate | Surrender Period | Best For |
|---|---|---|---|
| 3-Year | 4.60%–5.20% | 3 years | Shorter commitment, rate uncertainty |
| 5-Year | 5.00%–5.80% | 5 years | Best rate-to-liquidity balance |
| 7-Year | 5.20%–5.65% | 7 years | Maximum rate lock |
| 10-Year | 5.00%–5.40% | 10 years | Full rate-decline protection |
This guide draws on LIMRA fixed annuity market data (Q1 2026), A.M. Best insurer ratings, Wink's MYGA rate database (May 2026), IRS Publication 575 (annuity taxation rules), and NAIC guaranty fund coverage data by state. Rate ranges reflect top-tier A-rated carriers — actual rates vary by carrier and state. Last updated: May 2026.
A MYGA is a guaranteed savings account from an insurance company. You deposit money, the insurer guarantees a fixed interest rate for 3–10 years, and your earnings grow tax-deferred. At the end of the term, you choose what to do with the balance.
Top 5-year MYGA rates from A-rated carriers are running 5.00%–5.80% in May 2026. 3-year rates range from 4.60%–5.20%. Rates vary by carrier and are updated frequently — use a multi-carrier comparison tool for current quotes.
Both guarantee your principal and pay a fixed rate. Key differences: MYGA earnings grow tax-deferred (CDs are taxed annually), MYGAs are backed by insurance company reserves and state guaranty funds (not FDIC), and MYGAs offer 1035 exchange flexibility.
MYGAs are backed by the issuing insurance company's reserves plus state insurance guaranty associations (typically $250K–$500K per insurer per state). They are not FDIC insured. Sticking with A.M. Best A-rated or better carriers significantly reduces credit risk.
You'll receive a renewal notice 30–60 days before maturity. Options include renewing at the new offered rate, surrendering for full value (taxes owed on gains), annuitizing for lifetime income, or doing a 1035 exchange to another annuity tax-free.
Most MYGAs allow 10% of the account value per year as a penalty-free withdrawal. Beyond that, surrender charges apply — typically 7–9% in year 1, declining to 0% at maturity.
In a non-qualified account: no tax during accumulation; ordinary income tax owed on earnings when withdrawn (not capital gains rates). In a Traditional IRA: distributions are fully taxable as ordinary income. In a Roth IRA: qualified distributions are tax-free.
Most financial planning guidance suggests keeping no more than 25–40% of liquid retirement assets in surrender-period products. MYGAs work best for the portion of your portfolio you are confident you will not need for the full term.
This content is for educational and informational purposes only and does not constitute financial, tax, or investment advice. Annuity products carry risks including illiquidity during surrender periods, insurer credit risk, and tax implications. Rates are subject to change and vary by carrier. State guaranty association coverage varies. Consult a licensed financial advisor and tax professional before purchasing any annuity product.
A comprehensive guide to annuities for retirement income: how they work, all types explained (MYGA, FIA, SPIA, variable, DIA), full cost breakdown, and a framework for deciding whether an annuity belongs in your retirement plan.
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