What Is MYGA (Multi-Year Guaranteed Annuity)?

Why it matters

A MYGA lets a saver lock a rate for a known period. At the end of the guarantee period, the owner can renew, withdraw, or move the money, and surrender charges may apply before then. Unlike a bank CD, a MYGA is not FDIC insured, and guarantees depend on the insurer. Interest grows tax deferred, but withdrawals before age 59 and a half can bring a penalty. Rates and rules vary by carrier.

Source: investor.gov

Where we use this term

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Related terms

Fixed Annuity: A fixed annuity is an insurance contract that earns a stated interest rate set by the insurer. The rate is guaranteed for a period, and the insurer promises a minimum interest rate for the life of the contract.
Deferred Annuity: A deferred annuity is an annuity contract that delays payments until a future date chosen by the owner. Until then, the money can grow during an accumulation phase, tax deferred.
Surrender Charge: A surrender charge is a fee an insurer charges if you withdraw more than the allowed amount from an annuity, or cancel the contract, during the surrender period. It is usually a percentage that declines each year.
Surrender Period: A surrender period is the length of time, often several years, during which withdrawals above the allowed amount from an annuity trigger a surrender charge. After it ends, the owner can withdraw funds without that fee.
Market Value Adjustment (MVA): A market value adjustment (MVA) is a change to the value of an annuity withdrawal, based on interest rate changes since purchase. It can raise or lower the amount received when money leaves the contract early.

All 241 terms

Multi-Year Guaranteed Annuity (MYGA)

Why it matters

Where we use this term

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