Annuities
Insurance contracts that credit a declared rate — including multi-year guaranteed annuities (MYGAs) — for principal protection and tax-deferred growth.
A fixed annuity is a contract with an insurance company. You give them a premium. They credit a stated interest rate for a period. Your principal is not supposed to move with the stock market.
A declared-rate fixed annuity credits interest set by the carrier. A MYGA (multi-year guaranteed annuity) locks a rate for a set term, often 3, 5, or 7 years, then you can renew, withdraw, or move the value, subject to surrender charges and tax rules. These are insurance products, not bank CDs. They are not FDIC insured. Guarantees depend on the claims-paying ability of the issuing insurer. People use them when they want a known rate, tax deferral, and less market path-risk than a brokerage account — and they can live with limited liquidity during the surrender period. We look at the rate, the term, free-withdrawal provisions, and what happens at the end of the guarantee. We will not treat a MYGA as a checking account.
Who this is for
What it typically covers
A simple example
A 62-year-old does not need $200,000 for five years and does not want it in equities. A 5-year MYGA credits a guaranteed rate. If they need the whole sum in year two, surrender charges likely apply.
Good to know
Annuities are insurance contracts, not bank deposits and not FDIC insured. Guarantees depend on the issuing insurer. Surrender charges, limited liquidity, and tax on gains can apply. This is not investment, tax, or legal advice.
Guides
Guide
MYGAs, fixed indexed annuities, SPIAs, and DIAs. What each contract actually does, and what it is not.
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