Multi-Year Guaranty Annuities (MYGA)
Multi-Year Guaranteed Annuities (MYGAs) are annuities that operate very similar to Certificates of Deposits (CDs) that you might be familiar with at a bank. These products offer guaranteed interest rates for a set period of time, usually between 5-10 years. There are, however, a few key differences between MYGAs and CDs. For one, MYGAs are sold through insurance companies vs. through a bank. As MYGAs are annuities, they can be set up to pay out as income over a period of years, taken as a lump-sum at maturity, or continued with a renewed interest rate after maturity.
MYGAs offer vastly higher interest rates over a CD at the expense of some liquidity. While the current national average yield of a 5-year CD is 1.29%, MYGAs can offer as much as 3.8% for the same period. That's a difference of over $8,200 on a $100,000 deposit over 5 years.
Generally, to surrender a CD would cost three to six months of interest. MYGAs are subject to a surrender schedule that gradually decreases over time. For example, a 10-year MYGA may have a surrender schedule as follows: (9%, 9%, 8%, 7%, 6%, 5%, 4%, 3%, 2%, 1%). To offset the surrender schedule, many companies offer features to their annuities such as the ability to withdraw 10 percent of the value of the policy annually without a penalty. Some allow the full account to be surrendered without penalty in the event of a terminal illness diagnosis or if one is confined to a nursing home.
MYGAs are a great way to invest money in a safe-money product to outpace inflation and secure long-term growth.
The table below contains the top current MYGA rates.
Table is updated weekly.
|Carrier||Product||Years Guaranteed||Guaranteed Rate||Minimum Purchase|
|Atlantic Coast||Safe Haven FL||20||4.25%||$5,000|
|Atlantic Coast||Safe Haven FL||10||4.20%||$5,000|
|Sentinel Security||Personal Choice Annuity 10 (FL, CA)||10||4.10%||$2,500|
|Atlantic Coast||Safe Haven FL||7||4.09%||$5,000|
|Atlantic Coast||Safe Haven FL||6||4.02%||$5,000|
|Colorado Bankers||CBLA 7||7||4.00%||$10,000|
|Fidelity & Guaranty||FG Guarantee - Platinum 7||7||4.00%||$20,000|
|Atlantic Coast||Safe Haven FL||5||3.90%||$5,000|
|Fidelity & Guaranty||FG Guarantee - Platinum 7||5||3.80%||$20,000|
|Oxford Life||Multi-Select 4||4||3.35%||$20,000|
|Liberty Bankers||Bankers Elite 3||3||3.25%||$10,000|
|Guggenheim||Preserve MYGA 3||3||3.10%||$250,000|
|Equitable||Secure Savings 2 Year||2||2.80%||$10,000|
|Liberty Bankers||Bankers Accumulator||1||1.25%||$10,000|