MYGA's

MYGA stands for Multi-Year Guaranteed Annuity.
It’s a type of fixed annuity that works kind of like a CD (certificate of deposit) — but from an insurance company instead of a bank.

With a MYGA, you:

1. Put in a lump sum of money (like $10,000 or more)
    
2. The insurance company guarantees a fixed interest rate for a set number of years (usually 3, 5, 7, or 10)
    
3. At the end of the term, you can take your money out or roll it into something else
    

You buy a 5-year MYGA with $50,000.
It offers a 4.5% guaranteed interest rate per year.

That means:

• You’ll earn 4.5% interest every year for 5 years
   
• Your $50,000 will grow safely, without any market risk
   
• After 5 years, you’ll have about $62,250 (before taxes, assuming interest compounds)

Key Features:

          Feature                                                             What it Means

Fixed Rate                       Your interest rate stays the same for the whole term

No Market Risk              Your money is not tied to the Stock Market

Tax-Deferred                  You don't pay taxes on the interest until withdrawal

Surrender Period          You agree to keep your money for a set number of years

Principal Protection     Your original investment is safe and will not lose value

Things to Watch Out For:

• Surrender Charges: If you take money out early, you might pay a penalty.
• Interest Rate Lock: Once you commit, your rate won’t go up if the market improves.
• Taxable on Withdrawal: Interest earned is taxed when you take it out, usually as ordinary income.

Who Might a MYGA Be Good For?

A MYGA is a good fit if you:

• Want a safe place to grow your money with a guaranteed return
• Don’t want stock market risk
• Can leave your money alone for a few years
• Are near or in retirement and looking for predictable growth

How It Compares to a CD:

     Feature                                   MYGA                                  Bank CD

Who Offers it?                 Insurance Company              Bank

Tax Treatment                 Tax-Deferred                           Interest taxed yearly

Interest Rates                  Often Higher than CD's        Usually Lower

FDIC Insured                    No (but backed by insurer)  Yes

Summary:

A MYGA is like a CD with tax advantages, offered by an insurance company.
You get a guaranteed rate, no market risk, and steady growth— as long as you leave your money in for the full term.