How Multi-Year Guaranteed Annuities (MYGAs) Compare to CDs in 2025
MYGA vs. CDs: For conservative savers, the choice between a Certificate of Deposit (CD) and a Multi-Year Guaranteed Annuity (MYGA) can be confusing—especially when interest rates are competitive. But while they look similar on the surface, MYGAs offer a range of long-term benefits CDs simply can’t match.
MYGAs vs. CDs: What’s the Same?
Both MYGAs and CDs offer a fixed interest rate over a set period, making them ideal for investors who want predictable growth without market volatility. They’re both safe, low-risk products.
What Makes MYGAs Better?
Unlike CDs, MYGAs grow tax-deferred. You won’t owe taxes on interest each year, which allows your savings to compound more efficiently. MYGAs also offer flexibility at maturity—whether you want to take the money, reinvest, or convert it into income.
Why It Matters in 2025
In today’s high-interest environment, locking in a MYGA now may allow you to secure higher guaranteed growth for years. While CDs are tied to bank terms and often limited in flexibility, MYGAs are insurance products designed to be part of a retirement strategy.
Perfect for Retirement Accounts
MYGAs are particularly helpful for IRA rollovers or 401(k) transfers. They offer a smart way to lock in growth while keeping your retirement plan simple and secure.
Planning Across Generations
While you grow your money safely with a MYGA, your family can also benefit from college planning guidance through our partner firm, Diversified College Planning. Our firms work together to ensure both your retirement and your family’s education future are on track.
Learn more and compare today’s best MYGA rates on our annuity rate page.
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FAQs: MYGA vs CDs
What is the main difference between a MYGA and a CD?
A MYGA is a multi-year guaranteed annuity that offers tax-deferred growth and guaranteed interest for a set term. A CD is a bank product that offers guaranteed interest but taxes gains annually. MYGAs are insurance contracts; CDs are bank deposits.
Which typically pays higher interest: MYGAs or CDs?
MYGAs often offer higher guaranteed rates than CDs of similar terms because insurers can invest longer-term and price guarantees differently than banks.
Are MYGAs tax-deferred?
Yes. MYGA interest grows tax-deferred until withdrawn, which allows compounding without annual taxation. CD interest is taxed each year as it is earned.
Are MYGAs FDIC-insured?
No. MYGAs are backed by the financial strength of the issuing insurance company. CDs are backed by FDIC insurance up to applicable limits.
Do MYGAs have liquidity options?
Most MYGAs include annual penalty-free withdrawal limits, while CDs typically restrict any withdrawal until maturity or impose bank penalties.
Can you lose money in a MYGA?
MYGAs guarantee principal and the stated interest rate if held for the full term. Early surrender could incur charges or an MVA, depending on the contract.
Are MYGAs better for retirement planning?
Often yes, because tax-deferred growth, predictable guarantees, and optional income features make MYGAs a stronger fit for long-term planning than CDs.
Do MYGAs require a medical exam?
No. MYGAs are not underwritten for health and are available regardless of medical history.
Are CDs easier to open than MYGAs?
CDs are typically simpler to open through a bank. MYGAs require licensed insurance agent involvement and standard suitability review.
Which is better for short-term savings?
CDs may be better for very short durations. MYGAs often shine for 3–10 year savings goals where higher guaranteed rates and tax deferral matter most.
About the Author:
Jason Stolz, CLTC, CRPC, is a senior insurance and retirement professional with more than two decades of real-world experience helping individuals, families, and business owners protect their income, assets, and long-term financial stability. As a long-time partner of the nationally licensed independent agency Diversified Insurance Brokers, Jason provides trusted guidance across multiple specialties—including fixed and indexed annuities, long-term care planning, personal and business disability insurance, life insurance solutions, and short-term health coverage. Diversified Insurance Brokers maintains active contracts with over 100 highly rated insurance carriers, ensuring clients have access to a broad and competitive marketplace.
His practical, education-first approach has earned recognition in publications such as VoyageATL, highlighting his commitment to financial clarity and client-focused planning. Drawing on deep product knowledge and years of hands-on field experience, Jason helps clients evaluate carriers, compare strategies, and build retirement and protection plans that are both secure and cost-efficient.
