If you have CDs maturing right now, you’ve probably noticed something frustrating.
The renewal rates aren’t what they used to be—and in many cases, they’re dropping fast.
That’s why more retirees and pre-retirees are asking a smarter question:
Are MYGAs (Multi-Year Guaranteed Annuities) a better option than CDs right now?
Let’s walk through it—plain English, no hype—and I’ll show you why MYGAs are getting so much attention.
Need help choosing the best annuity for your unique situation? Have questions about getting an annuity? If so, it’s best to speak with an annuity specialist. Watch this short video to see how I can help you do this (at no cost to you!)
Tip: See how much an annuity could pay you using our annuity calculator
Why CD Renewals Are Disappointing Right Now
CDs work well when rates are rising.
But when rates start falling, renewals can quietly hurt your long-term plan.
Here’s the issue most people run into:
- You lock money up
- Rates reset lower at maturity
- Your income or growth drops—even though inflation hasn’t
That’s when many retirees start looking for alternatives that still feel safe and predictable.
What Is a MYGA (Multi-Year Guaranteed Annuity)?
A MYGA is essentially a fixed-rate contract with an insurance company.
You lock in a guaranteed rate for a specific period—typically 2 to 10 years.
Think of it as:
- CD-like safety
- Often higher rates
- Tax-deferred growth (this is a big deal)
💡 Pro Tip: MYGAs are especially attractive for non-qualified money (cash outside IRAs).
MYGA Rates vs CDs: Why MYGAs Look Better Right Now
Across most terms, MYGAs are currently paying as much—or more—than CDs.
From what I’m seeing:
- 3-year MYGAs are competitive, but usually not the best value
- 5-, 7-, and 10-year MYGAs often pay the highest rates
- Many offer 5%–6%+ guarantees, depending on term and state
That’s why I typically recommend 5 years or longer if you want to lock in stronger yields.
👉 Want to see current MYGA rates by term? You can check them directly on my site.
Simple Interest vs Compound Growth (This Matters)
When you compare MYGAs, you’ll often see:
- A base rate
- A yield-to-surrender rate
Here’s the difference:
- Simple interest pays based on your original deposit
- Compounding interest grows year after year
Example with $500,000:
- Simple interest at ~5.65% = about $28,000 per year you can live on
- Compounding growth = potentially $700,000+ at the end of the term
💡 Pro Tip: If you want income now, focus on simple interest + withdrawal options.
If you want growth, focus on compounding.
MYGAs vs CDs: The Tax Advantage Most People Miss
This is where MYGAs really shine.
With CDs: You pay taxes on interest every year, even if you don’t touch it
With MYGAs:
- Growth is tax-deferred
- No taxes until you take money out
- Works similar to an IRA—but without contribution limits
Withdrawals are taxed last-in, first-out, meaning earnings come out first.
👉 This can make a huge difference for retirees trying to control taxes.
What About Liquidity and Withdrawals?
Not all MYGAs are the same.
Some allow:
- 10% free withdrawals after year one
- Interest-only income
- Full access at the end of the term
Others offer higher rates but no withdrawals.
The right choice depends on:
- Whether you need income now
- How much liquidity you want
- How long you can realistically lock money up
👉 This is exactly why comparing contracts matters.
State-Specific Rates and Company Ratings
MYGA rates are state-specific, and not every carrier is available everywhere.
You’ll also see different:
- Financial ratings (A-, B++, etc.)
- State guarantee limits (often $250,000 per contract)
Many retirees:
- Split money across multiple contracts
- Stay within state guarantee limits
- Balance rate vs insurer strength
There’s no one-size-fits-all answer—but there is a right answer for you.
Need help with finding the best annuity for your retirement?
Click here to schedule a call with me.
On the call, I can help you:
- Determine what type of annuity is best for you
- Find the highest paying annuities for your unique situation
- Answer any other questions you may have