Multi-Year Guaranteed Annuities pay more than most bank CDs — and the interest compounds tax-deferred. I can show you the exact dollar difference for your specific situation — numbers, not estimates.
Every January your bank sends a 1099-INT. Every April you write a check to the IRS — on money you didn't withdraw and aren't spending. Here's what that actually costs you.
You earn $9,000 in interest. At the 22% federal bracket, you owe $1,980 to the IRS in April — on money sitting in the bank that you haven't touched. Over 5 years, that's nearly $10,000 paid out of pocket on a "safe" account.
You earn $10,000+ in interest in year one. You owe $0 to the IRS this year. The money that would have gone to taxes stays in your account and compounds. You pay tax only when you choose to withdraw — potentially in a lower bracket in retirement.
* Illustrative comparison: $200,000 principal, 22% federal bracket, 5-year term. CD at 4.5% annual; MYGA at 5.0% annual compound. Actual results vary by rate, bracket, and state taxes. Tax on MYGA deferred until withdrawal.
Your bank won't show you this table. I will.
| Feature | Bank CD | MYGA |
|---|---|---|
| Principal guarantee | FDIC up to $250K | Carrier strength + state guaranty association |
| Typical 5-year rate (June 2026) | 3.5–4.2% | 4.75–5.5%+ |
| Interest taxed annually | Yes — 1099-INT every year | No — deferred until withdrawal |
| IRMAA Medicare premium impact | Raises your MAGI every year | No MAGI impact until withdrawal |
| IRA / Roth IRA eligible | Yes | Yes |
| Partial withdrawals | Usually not without penalty | Typically 10%/year penalty-free |
| Death benefit / probate | Goes to estate | Passes directly to named beneficiary |
| Income options at maturity | Withdraw or renew | Withdraw, renew, roll over, or convert to lifetime income |
| Annual fees | None | None — rate you see is rate you get |
| Early surrender charge | Interest forfeiture | Surrender charge (declines each year; typically 0% after term) |
Enter your CD balance, current rate, and your tax bracket to see your estimated 5-year tax savings with a MYGA.
Calculation is for educational illustration only. MYGA rate estimated at 0.75% above your entered CD rate — actual MYGA rates vary by carrier, state, and term. Tax savings reflect deferral only; taxes will be owed upon withdrawal. Does not constitute financial advice.
A MYGA isn't right for every dollar. Here are the scenarios where it almost always wins.
You're about to renew a CD and your bank will offer you their current rate. Before you sign, compare it to the MYGA market — which is currently paying 1.5–2.5% more on equivalent terms, with tax deferral on top of that advantage.
CD Rollover OpportunityIf your modified adjusted gross income is near $106,000 (single) or $212,000 (married), your CD interest is pushing you toward Medicare premium surcharges of $594–$2,170 per year. A MYGA removes that interest from your MAGI until you withdraw — a dollar-for-dollar Medicare savings.
Medicare Premium PlanningYou have money you won't touch for 3–7 years. You want it safe and earning a guaranteed rate. You want to stop paying tax every April on interest you haven't spent. A MYGA solves all three — with no market risk and no annual tax event.
Tax-Deferred Safe MoneyEvery recommendation starts with your tax return — not a product brochure.
We look at your current CD or savings balance, your tax bracket, your IRMAA exposure, and whether the account is qualified (IRA) or non-qualified. This shapes the entire recommendation — most advisors skip this entirely because they don't do taxes.
I run a side-by-side comparison of current MYGA rates across A-rated carriers licensed in Virginia (and your state, if different). You see the actual rates, surrender schedules, and free withdrawal provisions before committing to anything.
If a MYGA is the right move, I handle the application from start to finish. If it's not the right fit for your situation, I'll tell you that directly — because my first job is your financial wellbeing, not a sale.
A plain-language guide showing the exact tax math, a complete feature comparison, real scenarios, and what to ask before buying any MYGA product.
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The questions I get on every first call — answered straight.
Bring your most recent tax return and the approximate balance of the CD or savings account you're considering. In 15 minutes I'll give you the exact tax savings estimate and current MYGA rates for your timeline.