Fixed annuities (MYGAs)
How a fixed annuity actually works.
A fixed annuity is a contract that pays a guaranteed rate for a fixed term — like a CD, but issued by a regulated insurer and often at higher rates. Here's how they work, what to watch for, and who they fit.
See today's top rates
Athene 
Corebridge (AIG) 
Lincoln Financial 
MassMutual 
Mutual of Omaha 
Nationwide 
New York Life 
North American 
Protective 
Pruco Life MYGA, decoded
Three plain English words.
"Multi-Year"
How long the rate is locked. A 7-year MYGA = same rate every year for seven years.
"Guaranteed"
The rate cannot change. The carrier locks it in for the full term.
"Annuity"
An insurance company holds the money, not a bank. At maturity you take it back.
A 7-year MYGA is a guaranteed rate held at an insurance company for seven years.
How a MYGA works
Three steps, end to end.
Fund
You wire a single premium
$5,000 to $1M+, depending on the carrier. Money goes to the insurer's general account.
Grow
Interest accrues at the guaranteed rate
Tax-deferred until withdrawal. Free-withdrawal provisions usually allow 10% per year without penalty.
Mature
At end of term, choose
Roll into a new MYGA (1035 exchange), take the cash, or annuitize for guaranteed income.
Run the numbers
Try it on your own deposit.
Two interactive tools for the trade-offs people get wrong most often. Move sliders, change rates, see what actually happens.
Comparing to a CD instead? Read the CD vs. fixed annuity guide →
What to watch for
The fine print that decides the outcome.
These are where most MYGA buyers regret the call. Each one's worth understanding before you sign.
- 01
Taxes on MYGAs
Non-qualified MYGAs grow tax-deferred but withdrawals are taxed as ordinary income on the gain—not capital gains. IRA money follows different rules.
- 02
Surrender charges
Pull money beyond the free-withdrawal allowance and the carrier may apply a schedule of charges. Read your contract, then model with the estimator.
- 03
Market value adjustment (MVA)
Some MYGAs add an MVA on certain early exits. If rates moved since you bought, your net cash-out can differ from the printed surrender % alone.
- 04
1035 exchange
At maturity you can roll to a new MYGA without triggering tax. Strict rules — the carrier handles the paperwork.
- 05
Not FDIC-insured
MYGAs are insurance contracts backed by the carrier and state guaranty rules—not bank deposit insurance. Know the difference before you move bank money.
- 06
End-of-term window
Most carriers give a 30-day window to renew, roll, or cash out. Miss it and you auto-renew at a new (often lower) rate.
- 07
Rate lock
The quoted rate isn't guaranteed until the carrier receives your funds. Most lock for 30–60 days.
The safety layers
How a MYGA is protected.
Not FDIC-insured. Insurance carriers and state guaranty associations carry the load.
- Layer 1
The carrier's reserves
Regulated reserves backing every contract. Strength varies — the AM Best rating is the standard shorthand.
- Layer 2
State guaranty associations
If a carrier fails, your state's guaranty association covers principal up to the state limit (typically $250K–$500K).
Facing a specific MYGA decision?
A carrier, a term, a rate — with the math, the alternative, and the call we'd make if it were our money.