MYGA vs CD Comparison Calculator
Compare a multi-year guaranteed annuity (MYGA) against a bank CD. See after-tax returns, effective rates, and year-by-year growth to decide which is right for your savings.
Compare Side by Side
MYGA Wins by $5,117
After 5 years and taxes, the MYGA produces $5,117 more (4.31% advantage).
MYGA
CD
Growth Over Time
Key Takeaways
Tax deferral is your secret weapon
Because the MYGA grows tax-deferred, you earn interest on the money that would have gone to taxes each year. This compounds over 5 years into a $5,117 advantage.
1.0% rate spread compounds significantly
That seemingly small rate difference produces $11,870 more interest over 5 years on a $100,000 investment.
MYGA trade-off: less liquidity
CDs at banks are FDIC insured and more liquid. MYGAs are backed by insurance company reserves and typically have surrender charges if withdrawn early. Choose based on when you'll need the money.
Current MYGA rates are historically high
MYGA rates move with the broader interest rate environment. When rates eventually fall, today's locked-in rates become unavailable. If you're considering a MYGA, current rates represent an unusually strong opportunity.
Safety comparison
CDs are FDIC insured up to $250k. MYGAs are backed by insurance company general accounts and state guaranty associations (typically $250k). Both are considered very safe.
Want guaranteed income, not just growth?
MYGAs grow your money safely, but what about turning that money into income you can't outlive? A SPIA or FIA can convert a lump sum into guaranteed monthly income for life — filling your retirement income gap permanently.
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Important Disclosures
- MYGA interest compounds annually — actual compounding frequency may vary by carrier
- CD interest assumes annual compounding — banks may compound daily or monthly
- Tax calculations use a flat rate — actual taxes depend on your full income picture
- Tax-deferred growth assumes taxes are paid at withdrawal at the same bracket
- Surrender charges, early withdrawal penalties, and fees are not included
- Consult a licensed financial professional before making decisions
Learn More
Frequently Asked Questions
What is a MYGA?
A MYGA (Multi-Year Guaranteed Annuity) is a fixed annuity that offers a guaranteed interest rate for a set period — typically 3 to 10 years. Think of it like a CD, but issued by an insurance company with tax-deferred growth.
How is a MYGA different from a CD?
Both offer guaranteed rates, but MYGAs grow tax-deferred (you don't pay taxes on interest until withdrawal), often have higher rates, and are backed by insurance company reserves rather than FDIC. CDs offer more liquidity and FDIC insurance up to $250k.
Why does tax deferral matter?
With a CD, you pay income tax on interest every year — reducing what compounds. With a MYGA, all interest compounds tax-free until withdrawal. Over 5–10 years, this can mean thousands more in your pocket, especially in higher tax brackets.
Are MYGAs safe?
MYGAs are backed by insurance company general accounts and state guaranty associations (typically $250k coverage). They are not FDIC insured like CDs, but insurance company reserves are heavily regulated and historically very secure.