What Is a MYGA?
A Multi-Year Guaranteed Annuity is the institutional equivalent of a CD — but issued by an insurance company instead of a bank. You deposit a lump sum, the carrier guarantees a fixed interest rate for a set number of years, and you receive your principal plus accumulated interest at maturity.
The critical difference from a bank CD: the interest grows tax-deferred. For credit unions structured as tax-exempt entities, this may have less direct impact, but for foundations, CUSOs, and affiliated nonprofits, the tax deferral can be significant.
Current Rate Environment
MYGA rates fluctuate with the broader interest rate environment and vary by carrier, term length, and deposit size. As a general benchmark, A-rated carriers have recently offered:
- Shorter terms (2–3 years): Competitive with or slightly above brokered CD rates
- Mid-range terms (4–5 years): Typically 50–150 basis points above comparable Treasuries
- Longer terms (6–7+ years): Higher guaranteed rates reflecting the longer commitment
The key advantage: whatever rate you lock in holds for the full guarantee period. If market rates decline, your MYGA rate doesn't change.
Rates change frequently. Contact us for current quotes from A-rated carriers specific to your deposit size and term preference.
What Drives MYGA Rates
Insurance carriers set MYGA rates based on their general account investment yields — primarily investment-grade corporate bonds and commercial mortgages. This is why MYGA rates often exceed Treasury yields by 80–150 basis points: the carrier is passing through a portion of their portfolio spread.
Key factors affecting rates:
- 10-Year Treasury yield — the baseline benchmark
- Corporate bond spreads — wider spreads = higher MYGA rates
- Carrier appetite — some carriers raise rates to attract deposits when they see good investment opportunities
- Competitive dynamics — carriers compete for institutional deposits
How to Evaluate a MYGA Offer
Carrier Strength
Non-negotiable: AM Best rating of A (Excellent) or higher. We work exclusively with carriers rated A or above. This matters because the guarantee is backed by the carrier's general account, not a government agency.
That said, the insurance industry's track record is remarkably strong. A-rated carriers have historically demonstrated resilience even during severe economic downturns, including 2008. State guaranty associations provide an additional layer of protection.
Surrender Schedule
Most MYGAs allow 10% annual free withdrawals without penalty. Full surrender before the guarantee period ends typically carries a declining charge (e.g., 5% in year one, declining to 0% by maturity). Understand this before funding.
Renewal Terms
At maturity, most MYGAs offer a renewal rate or a 30-day window to withdraw without penalty. Get the renewal terms in writing upfront.
Minimum/Maximum Deposits
Institutional MYGAs typically start at $100,000, with some carriers offering enhanced rates above $1 million or $5 million.
Laddering Strategy
Just like CDs, MYGAs can be laddered:
- $5M in a 2-year MYGA
- $5M in a 3-year MYGA
- $5M in a 5-year MYGA
Each year, a portion matures and can be reinvested or returned to liquid reserves. This provides both yield optimization and regular liquidity access.
Want to see current MYGA rates from A-rated carriers? Request a quote and we'll send you a personalized rate comparison within 24 hours.