Comparison tool

MYGA vs. CD calculator.

Compare after-tax growth of a multi-year guaranteed annuity (MYGA) against a CD over your term, using rates you enter yourself. MYGAs grow tax-deferred; CDs are taxed as interest is credited. Enter the actual rates you have been quoted — a headline MYGA rate credited on a simple-interest basis is not comparable to a CD's APY.

After-tax side-by-side growth
Your rates enter what you are quoted
Estimate illustrative, not a quote

Run the comparison See MYGA rates

Data as of October 13, 2026

Your scenario

Investment amount

Term length MYGA rate (% effective annual yield) — pre-filled for the term you select; enter the effective annual yield you were quoted, not a simple-interest headline rate CD rate (%) — pre-filled with a hypothetical 5-year CD APY (4.40%), so the comparison is top-of-market on both sides. Replace it with the CD APY you are actually offered for your term; the FDIC all-institution average is just 1.41%, but that is a survey figure, not a rate to compare against Marginal tax rate (federal + state) (%)

MYGA advantage over CD $9,276 more after-tax over the term

MYGA final balance $135,727

CD final balance $124,023

MYGA after-tax final* $127,153

CD after-tax final $117,876

*Assumes you withdraw and pay tax on MYGA gains at end of term. If you 1035-exchange or renew, the tax deferral compounds further. The MYGA field is pre-filled with the highest effective yield for the selected term in our October 13, 2026 rate table (carriers rated A.M. Best A- or better); enter the effective annual yield of the contract you are actually considering, not a headline rate. This is an illustration based on the figures you enter — not a quote, an offer of insurance, or a guarantee of any result. A MYGA is not FDIC-insured; its guarantees depend on the claims-paying ability of the issuing insurer.

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Three ways a MYGA can beat a CD — and when it doesn't

Often a higher gross rate

Published MYGA rates frequently sit above CD rates, but the size of that gap depends entirely on which CD you compare against. Measured against the FDIC national deposit rate the gap looks large; measured against a top online or brokered CD it narrows sharply. Two cautions before you count on any premium: some MYGA headline rates are credited on a simple-interest or first-year-bonus basis and therefore do not compound, and the highest rate at a term often comes from a lower-rated carrier. Compare effective annual yield to APY, from carriers whose financial strength you are comfortable with.

Tax-deferred growth

CD interest is taxed every year as it's earned. MYGA interest accumulates tax-deferred — you only pay tax on withdrawal. Over 5 years, deferral by itself typically adds about 0.3% to 1% of your original deposit in total (roughly 0.05 to 0.2 percentage points a year), depending on the rate and your tax bracket. At the pre-filled rates, most of the MYGA’s edge comes from its higher rate, not from deferral.

End-of-term flexibility

At MYGA maturity, you can withdraw (paying tax then), renew with the same carrier, or 1035 exchange to another annuity — keeping the gain tax-deferred until you withdraw it (or until death, when your beneficiaries owe ordinary income tax on it). A multi-year CD held outside an IRA has already been taxed on its interest year by year, so it simply matures into cash.

The trade-off: MYGAs have surrender charges in early years and state guaranty fund coverage ($250,000 per insurer in most states and more in a few — but California covers only 80% of present value up to that cap) rather than FDIC. See our full MYGA vs. CD analysis.

$100,000 in a 5-year MYGA vs a 5-year CD

Illustrative, 24% tax bracket, both lines after tax: $9,276 more over 5 years, almost all of it from the rate difference (6.3% vs 4.4%) rather than from deferral. The 4.4% CD leg is an assumed APY, not a quote; the FDIC all-institution average is 1.41%. A MYGA is an insurance contract, not FDIC-insured.

Why a MYGA often beats a same-term CD

A MYGA and a CD both lock a fixed rate for a set term, but a MYGA grows tax-deferred while CD interest is taxed every year — which drags compounding. In a taxable account and a meaningful bracket, that deferral plus a typical rate premium is the edge shown above. In an IRA the deferral advantage disappears (the account is already deferred) — compare on rate, carrier strength and liquidity only.

The differences that matter

Guarantee: a CD is FDIC-insured; a MYGA is backed by the insurer and your state guaranty association (limits vary).
Liquidity: MYGAs allow ~10%/yr penalty-free; early surrender charges can exceed a CD's penalty.
Pre-59½: MYGA gains may incur a 10% IRS penalty on top of ordinary tax.

Warning: only commit money you can leave untouched for the full term, and buy only from highly rated carriers.

Keep going

Read the full MYGA vs. CD guide, see our MYGA rate comparison, or compare carriers in best MYGA carriers.

MYGA vs. CD FAQs

Why can a MYGA end up ahead of a CD at the same headline rate?

MYGA interest grows tax-deferred while CD interest is taxed annually, so in a taxable account the MYGA compounds on the full balance each year while the CD compounds on the after-tax balance. That mechanical difference disappears inside an IRA or any account that is already tax-deferred. Whether the rates themselves favor the MYGA depends entirely on the specific contract and the specific CD, so compare the contract's effective annual yield against the CD's APY — and note that some headline MYGA rates are credited on a simple-interest or first-year-bonus basis and do not compound at all.

Is the MYGA always better than a CD?

No. CDs win when (1) you need liquidity within the term — MYGAs have surrender charges of 7%-10% in year 1; (2) you're holding in a tax-deferred account like an IRA where the MYGA's tax deferral adds no value; (3) you want federal deposit insurance: CDs are FDIC-insured up to $250,000 per depositor, per bank, while a MYGA rests on the insurer's claims-paying ability.

What tax bracket should I use?

Your marginal federal tax rate plus your state rate. If you're in the 22% federal bracket in California (9.3% state), use roughly 31.3%. Conservative estimate. For retirees with lower current income, use your expected withdrawal-year rate, which may be lower.

What happens to my MYGA at the end of the term?

You have three options: (1) Withdraw the cash — gains are then taxed as ordinary income; (2) Renew with the same carrier at new rates; (3) 1035 exchange to another annuity, preserving tax-deferral. The end-of-term decision is where most of the MYGA's tax-deferral advantage gets realized — or sacrificed.

What about CDs at top online banks vs. the national average?

This matters more than most comparisons admit. The FDIC national deposit rate averages every insured institution, including branch banks paying close to nothing, so it sits far below what a motivated saver can actually get — top online and brokered CDs pay substantially more than that average. If you compare a MYGA against the national average you will overstate the annuity's advantage, sometimes by several percentage points. Compare against a CD APY you have actually been quoted, and make sure the MYGA figure you use is its effective annual yield rather than a simple-interest or first-year-bonus headline rate.

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No carrier, advertiser, or listed agent can pay for a ranking, and none reviews our content before publication. Figures are drawn from primary sources — A.M. Best, NAIC, the IRS, SSA, and Treasury — and checked against them. Our content is researched and drafted with the help of AI tools and verified against those sources; see our editorial policy.

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How this calculator works

The MYGA balance compounds at the MYGA rate, untaxed during the term. The CD balance compounds at the after-tax rate each year (CD rate × (1 - tax rate)); the "CD final balance" row shows that same CD compounded at its full rate before tax, so the two "final balance" rows compare gross with gross and the two "after-tax" rows compare net with net. At end of term, MYGA gains are taxed once at the marginal rate. Real-world results vary by exact tax bracket, state, and whether the MYGA is held inside an IRA. See our full methodology.