If you want a guaranteed interest rate for a set number of years, without watching the stock market, a multi-year guaranteed annuity (MYGA) is worth a look. Many people in Birmingham compare MYGAs to bank CDs, especially as they near retirement and want part of their savings to grow predictably.
The catch is that MYGA rates, terms and surrender rules vary a lot from one insurance company to the next. Two MYGAs with the same term can pay noticeably different rates and handle early withdrawals very differently.
At Assurance Financial Solutions, we’re an independent insurance agency in Birmingham. We aren’t tied to one company, so we compare MYGAs from multiple A-rated carriers side by side and explain the trade-offs in plain English. For an overview of every annuity type, see our main annuities page.
Want current MYGA rates? Call Sam Price at (205) 578-2097 or request a free MYGA comparison.
What Is a MYGA?
A multi-year guaranteed annuity is a type of fixed annuity. You make a single deposit with an insurance company, and the company guarantees a fixed interest rate for a set term, commonly three to ten years.
Your rate doesn’t change during the term, and your balance doesn’t go down when the market does. Interest builds tax-deferred until you take it out. At the end of the term, you can usually withdraw the money, roll it into a new MYGA, or turn it into a stream of income.
People often use MYGAs for money they want to keep safe and growing but won’t need for several years, such as part of a retirement nest egg or a maturing CD.
MYGA vs. CD: How They Compare
A MYGA works a lot like a CD, but with a few important differences in taxes, protection and access to your money.
| MYGA | Bank CD | |
|---|---|---|
| Issued by | Insurance company | Bank or credit union |
| Rate | Fixed for the full term | Fixed for the full term |
| Common terms | About 3 to 10 years | A few months to 5 years |
| Taxes on interest | Tax-deferred until withdrawn | Taxed each year, even if left in the account |
| Protection | Backed by the insurer, plus Alabama’s guaranty association (up to $250,000 in annuity value) | FDIC-insured up to $250,000 per depositor, per bank, per ownership category |
| Early access | Usually a yearly free withdrawal; surrender charges above that | Early-withdrawal penalty, often a few months of interest |
| Withdrawals before 59½ | Earnings may face a 10% IRS penalty | No IRS age penalty |
| At maturity | Withdraw, renew, roll to a new MYGA or turn into income | Withdraw or renew |
For savers who won’t need the money for several years and want to defer taxes, a MYGA can pay more than a CD of similar length, depending on current rates. For money you may need soon, or if you’re under 59½, a CD can be the better fit. We’ll help you weigh both honestly.
How MYGA Rates and Terms Work
When you buy a MYGA, you choose a term, and the insurance company locks in your rate for that whole period. Longer terms often pay higher rates, but not always. It depends on each carrier’s investments and how much new business it wants at the moment.
Rates also differ with:
- The carrier. Each company sets its own rates, and they change often. The highest rate one month may not be the highest the next.
- Your deposit. Some carriers pay a higher rate on larger deposits, such as $100,000 or more.
- The carrier’s rating. Higher-rated companies sometimes pay a little less. We’ll show you that trade-off clearly.
- Contract features. Extra flexibility, such as larger free withdrawals or no market value adjustment, can come with a slightly lower rate.
Because rates move, we don’t publish a rate table here. Call or request a quote, and we’ll show you current MYGA rates side by side for the terms you’re considering.
Getting to Your Money: Surrender Charges, Free Withdrawals and MVAs
A MYGA is meant to be held for its full term. If you take out more than the contract allows before the term ends, you’ll usually pay a surrender charge. These charges typically shrink each year and disappear when the term is over.
Most MYGAs still give you some access along the way:
- Free withdrawals. Many contracts let you take out a portion each year, often your interest or a set percentage of the balance, without a surrender charge.
- Market value adjustment (MVA). Some MYGAs adjust what you receive on an early surrender based on how interest rates have moved since you bought. If rates have risen, the adjustment can lower your payout; if rates have fallen, it can raise it. Not every MYGA has an MVA.
- Waivers. Many contracts waive surrender charges in certain situations, such as nursing home confinement, terminal illness or death.
These features vary more than rates do, which is why we compare the full contract, not just the headline number. A slightly lower rate with better access can be the smarter choice if there’s any chance you’ll need the money early.
How MYGAs Are Taxed
- Tax deferral. Interest isn’t taxed while it stays in the annuity. According to IRS Publication 575, earnings aren’t taxed until they’re distributed, whether as a withdrawal or as annuity payments.
- Earnings come out first. For a MYGA bought with after-tax money, withdrawals are generally treated as coming from earnings first, so the first dollars you take out are taxable as ordinary income.
- Withdrawals before 59½. As the SEC’s investor guide to annuities notes, withdrawing before age 59½ may mean a 10% IRS tax penalty on top of regular income tax, with some exceptions.
- Moving to a new annuity. Following the tax rules, an exchange of one annuity for another may not trigger a taxable event, so your tax deferral can continue. This is often called a 1035 exchange.
- IRA money. You can also buy a MYGA inside an IRA. In that case, the IRA’s tax rules apply.
We’re not tax advisors, so we’ll coordinate with your CPA when taxes are a big part of the decision.
How Safe Is a MYGA?
A MYGA’s guarantees are only as strong as the insurance company behind them. That’s why we focus on carriers with strong financial strength ratings from agencies such as AM Best, and we show you each carrier’s rating alongside its rate.
Annuities aren’t FDIC-insured, as the FDIC notes. Instead, Alabama residents have a backstop through the Alabama Life & Disability Insurance Guaranty Association. If an insurer fails, the association covers up to $250,000 in present value of annuity benefits, with a $300,000 overall limit per person across life and annuity coverage (NOLHGA).
For larger amounts, some clients spread their money across more than one carrier so each stays within those limits. We can help you structure that.
How We Shop MYGAs for You
As an independent agency, we compare MYGAs across multiple A-rated carriers instead of offering one company’s product. For each option, we lay out:
- The guaranteed rate and term
- The carrier’s financial strength rating
- The surrender schedule and free withdrawal amount
- Whether there’s a market value adjustment
- Surrender charge waivers, such as nursing home or terminal illness
- What happens when the term ends
Then we help you pick the one that fits your timeline and how much access you may need. There’s no cost for the comparison.
What happens at the end of the term?
When your MYGA term ends, you’ll usually have a window, often around 30 days, to decide what to do. You can typically withdraw the money without a surrender charge, roll it into a new MYGA through a tax-free exchange, or turn it into guaranteed lifetime income. If you do nothing, many contracts renew automatically, sometimes at a lower rate. We’ll reach out before your term ends so you can shop again.
Frequently Asked Questions About MYGAs
Who offers MYGAs in Birmingham, Alabama?
MYGAs are issued by insurance companies and sold through licensed agents. Assurance Financial Solutions is an independent agency in Birmingham that compares MYGAs from multiple A-rated carriers side by side, so you can see rates, terms and surrender rules in one place. Call Sam Price at (205) 578-2097.
Is a MYGA better than a CD?
It depends on your timeline and taxes. A MYGA offers tax deferral and longer guaranteed terms, while a CD is FDIC-insured and has no age-based IRS penalty. For money you won’t touch for several years, a MYGA is often worth comparing.
What MYGA term should I choose?
Choose a term that matches when you’ll need the money. Shorter terms keep you flexible; longer terms may pay more but tie the money up longer. Many people ladder several MYGAs with different end dates.
Can I lose money in a MYGA?
Your principal and guaranteed interest don’t drop with the stock market. You could receive less than you put in if you surrender early and pay surrender charges or a negative market value adjustment.
Can I take money out before the term ends?
Usually yes, up to the contract’s free withdrawal amount each year. Taking out more typically means a surrender charge, and withdrawals before age 59½ may also face a 10% IRS penalty.
Can I put IRA money into a MYGA?
Yes. You can buy a MYGA inside an IRA or roll IRA funds into one. The IRA’s tax rules then apply.
Does it cost anything to compare MYGAs with you?
No. A comparison is free and there’s no obligation.
Compare MYGA Rates with Sam Price in Birmingham
Whether you have a CD maturing, a 401(k) rollover or savings you want to grow safely, we’ll compare current MYGA rates and contract terms across multiple carriers and explain everything in plain English. There’s no cost and no obligation.
- Call: (205) 578-2097
- Email: sam@afslife.com
- Meet: By appointment only, in person in Birmingham or virtually
Request a free quote or explore all of our annuity options.
Assurance Financial Solutions is an independent insurance agency. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Rates, terms, surrender charges and availability vary by carrier and state and are subject to change. This page is general information, not tax or investment advice.
Reviewed by Sam Price, independent insurance agent, Assurance Financial Solutions (Alabama License #653491, NPN 16846840). Last updated October 2026.