MYGA Annuities Explained: Rates, Terms & How They Work

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: A multi-year guaranteed annuity (MYGA) is a fixed insurance product that pays a locked interest rate for a set term — typically 3, 5, 7, or 10 years. Your principal is fully protected, interest grows tax-deferred, and as of mid-2026, top 5-year MYGA rates range from 5.40% to 5.85% and top 3-year rates from 5.10% to 5.55% — typically 75 to 140 basis points above comparable bank CDs, while still offering the added advantage of tax-deferred growth. What Is a Multi-Year Guaranteed Annuity? A multi-year guaranteed annuity — commonly called a MYGA — is an insurance product designed for safe, predictable accumulation. You make a single lump-sum deposit, agree to a fixed term, and receive a contractually guaranteed interest rate for the entire period. At the end of the term, you receive your original principal plus all accumulated interest. MYGAs are often described as the insurance world's equivalent of a bank CD. The structural similarities are real: fixed term, guaranteed rate, principal protection. The key differences are the issuer (an insurance company rather than a bank), the tax treatment (tax-deferred rather than annually taxable), and typically the rate (MYGAs have historically offered higher rates than CDs for equivalent terms). MYGAs are not investment products. They do not fluctuate in market value. There are no stocks, no bonds, no market exposure. The insurance company invests the premium in its own fixed-income portfolio and contractually guarantees your return regardless of what financial markets do. This makes MYGAs particularly well-suited for retirees and pre-retirees who want principal protection with a competitive, predictable yield. How MYGAs Work: The Mechanics The basic structure of a MYGA is straightforward, but understanding the mechanics helps you evaluate products and make smart comparisons. Premium and Term Selection You begin by choosing how much to deposit (the premium) and what term length fits your timeline. Most carriers offer terms from 2 to 10 years, with 3-, 5-, and 7-year options being the most commonly selected. Minimum premiums typically start at $10,000, though some carriers require $25,000 or more for their highest-rate products. Some MYGAs offer slightly higher rates for larger premium amounts — a tiered structure worth asking about