Fixed Annuities vs. MYGAs – Key Differences

1. Fixed Annuity (Traditional)

• Rate Guarantee: Usually for 1 year at a time.

• Surrender Period: Longer (e.g., 5, 7, 10 years).

  How it works:

  • You get a declared fixed interest rate for the first year.

  • After that, the insurance company can change the rate annually (within limits set in the contract, usually a guaranteed minimum).

    Example :

  • 1-year guaranteed rate @ 5.10%
  • 5-year surrender schedule → you can’t fully withdraw without penalty for 5 years.

2. MYGA (Multi-Year Guaranteed Annuity)

• Rate Guarantee: Matches the surrender period (e.g., 5 years, 7 years).

• Surrender Period: Same as the guarantee period.

  How it works:

  • The interest rate is locked in for the entire surrender term (so you know exactly what you’ll earn each year).

    Example:

  • 5-year MYGA @ 5.25%
  • You’re guaranteed that rate for all 5 years, and you can’t withdraw without penalty until the surrender period ends.

✅ Quick Way to Spot the Difference

• If Guarantee Period < Surrender Period → Fixed Annuity (rate only locked short-term, surrender is longer).
• If Guarantee Period = Surrender Period → MYGA (rate locked for the whole term).

This information is provided for educational purposes only and does not constitute product or sales advice. For specific questions about annuity products, please contact the carrier directly, or consult your IMO, BGA, General Agent, or other authorized distributor for guidance.