Why MYGA rates track Treasury yields — and re-price unevenly

Multi-year guaranteed annuity (MYGA) rates do not move in isolation. They are anchored to the broader bond market, so understanding how that link works tells you far more than any single day's quote. This is an evergreen guide to the mechanism: why MYGA rates follow Treasury yields, why a modest move in yields re-prices unevenly across carriers, and how to shop for a competitive rate from a financially strong carrier.

Example rates by term

As of October 13, 2026 (verified against published product pages that day), the highest effective annual yields by term among A.M. Best A- and better carriers look like this:

• 2-year MYGA: 4.80% (Aspida Synergy Choice, A-)
• 3-year MYGA: 5.70% (Aspida Synergy Choice, A-)
• 5-year MYGA: 6.30% (Aspida Synergy Choice, A-)
• 7-year MYGA: 6.35% (Aspida Synergy Choice, A-)
• 10-year MYGA: 6.00% (Lincoln Financial MyGuarantee Plus, A)

A note on headline rates: the highest advertised figures in the market are often first-year bonus rates from lower-rated carriers (for example, Atlantic Coast Life's Safe Harbor Bonus Guarantee: 7.45% in year one, then 6.45%), credited as simple interest rather than compound — the effective annual yield over the full term is materially lower (about 5.91% on the 5-year schedule last readable September 4, 2026; the 7- and 10-year schedules were not published at that check) — and the carrier was cut by A.M. Best to C+ (Marginal) on September 22, 2026, a rating still under review. South Carolina's insurance director asked a court on September 15, 2026 to place the carrier in rehabilitation, and Florida suspended its certificate of authority on September 30, 2026 (Insurance Journal report). Headline rates like these are not directly comparable to a bank CD's compounding APY.

Top rates differ sharply from carrier averages — across all carriers the average 5-year MYGA is closer to 5.59% (an illustrative figure). Because individual carriers move at different times, see our MYGA rate comparison for dated representative figures, and confirm the current rate with a licensed specialist before you decide.

Why MYGA rates track Treasury yields

Insurers back MYGA contracts largely with investment-grade bonds — intermediate Treasuries and high-grade corporates. The yield a carrier earns on that bond portfolio sets the ceiling on the rate it can guarantee to you. When the bond market's yields rise, carriers can fund a higher new-money guarantee; when yields fall, the new rate a carrier can offer falls with them.

Federal Reserve policy transmits through the same channel. The Fed sets short-term rates directly, but MYGA pricing is more sensitive to intermediate yields like the 5- and 10-year Treasury. Fed decisions and the inflation outlook shape where those intermediate yields settle, which in turn shapes what carriers can pay. The link is real, but it is indirect and operates with a lag — not a same-day, one-for-one move.

Why a small move re-prices unevenly

Carriers do not all reset rates on the same schedule. When bond yields shift, some insurers update new-money rates within days, others wait weeks, and a few hold a rate to win market share. The result is that even a modest move in Treasury yields produces an uneven patchwork of carrier rates for a stretch of time.

That unevenness is exactly why shopping matters more than timing. At any given moment, the spread between the best A-rated carrier and an average carrier on the same term is often wider than a typical short-term market move. You capture more value by surveying several financially strong carriers than by trying to guess the next yield wiggle.

What it means if you're shopping

Two habits follow from the mechanism:

1. Survey multiple carriers. MYGA rates are not uniform. The gap between the top rate and the carrier average is frequently larger than the market's recent move, so comparing several A-rated insurers on your chosen term is the highest-leverage step.
2. Lock when you find a strong offer. Once you fund a contract with a competitive rate from a financially sound carrier, that rate is guaranteed for the full term the day you fund. You are not exposed to later declines — which is the core appeal of a guaranteed product.

How a MYGA compares to a CD

MYGAs are frequently compared to bank certificates of deposit, and the gap is meaningful. As of October 2026 a leading 5-year MYGA — 6.30% effective annual yield from an A- carrier (Aspida Synergy Choice, $100,000+ band, checked October 13, 2026) — is far above the 5-year CD national average of 1.41% (FDIC, October 19, 2026). But that average includes big banks paying close to nothing, and many banks beat it, so compare against a CD you could actually open. Against a competitive 5-year CD at, say, 4.40% APY (an assumed rate for illustration, not a quote), the leading MYGA is about 1.9 points ahead, and even the average 5-year MYGA, an illustrative ~5.59%, is about 1.2 points ahead. The leading MYGA is also about 1.3 points above the 5-year Treasury (5.02% at the October 9, 2026 close), but that comparison isn't like-for-like. Treasuries are backed by the U.S. government, their interest is exempt from state and local income tax, and they can be sold before maturity at market prices. A MYGA's guarantee rests on the insurer's claims-paying ability, and early withdrawals above the free amount can trigger surrender charges and, on many contracts, a market value adjustment.

Tax deferral helps, but it does not widen the gap. For money outside an IRA, CD interest is taxed every year, while MYGA growth is taxed only when you withdraw it. Taxes still shrink both yields, so the after-tax gap in percentage points is usually smaller than the headline gap. For example, at a 32% tax rate over five years, a 6.30% MYGA works out to about 4.45% a year after tax, and a 4.40% CD to about 2.99%. That's a gap of about 1.5 points, versus 1.9 before tax. Deferral helps most if you can withdraw in a year when you're in a lower tax bracket. Run your premium, term and tax bracket through our MYGA vs. CD calculator to see the after-tax gap for your situation.

The bottom line

You can't control where Treasury yields go, but you can control how well you shop. Because carriers re-price unevenly, a competitive MYGA is usually found by comparing strong carriers on the term you want — not by waiting on a forecast. When you're ready, see dated example rates by term on our MYGA rates page.