A Multi-Year Guaranteed Annuity (MYGA) is a type of fixed annuity that offers a guaranteed interest rate for a set period, typically 3 to 10 years. It's designed as a long-term investment, often used for retirement savings, and provides a predictable income stream. MYGAs are issued by insurance companies and can offer higher interest rates than traditional fixed annuities
Guaranteed Interest Rate:
MYGAs offer a predetermined interest rate for the term, ensuring a predictable return.
Tax-Deferred Growth:
Interest earned within the MYGA grows tax-deferred, meaning you don't pay taxes on it until you withdraw the money.
Lump Sum Deposit:
MYGAs are typically purchased with a single lump sum payment.
Long-Term Investment:
MYGAs are designed for long-term savings and investment, often used for retirement planning.
Withdrawal Restrictions:
MYGAs typically have withdrawal restrictions, including potential penalties for early withdrawals.
Protection from Market Risk:
MYGAs are not tied to the stock market, offering protection from potential losses in the market.
Similar to CDs:
MYGAs are often compared to certificates of deposit (CDs) due to their similar structure and fixed interest rates.
