How does this MYGA calculator work?
You tell it four things: how much you plan to deposit, the guarantee term in years, the annual rate you want to test, and your tax bracket. It compounds your deposit once a year for the full term, shows the ending value and total interest, works out what you would keep after tax if you cashed out at maturity, and lines that up against a CD earning the same rate but taxed every single year. A year-by-year table shows the balance growing at each stop along the way.
How much can a MYGA grow?
Because a multi-year guaranteed annuity fixes one rate for the whole term, the math behind it is about as predictable as retirement planning gets. Say you tested a hypothetical 5.75% rate on a $100,000 deposit over a 5-year term. Left alone to compound once a year, that deposit would grow to roughly $132,251, every dollar of it tax-deferred until you take money out. Run your own numbers above to see what a different deposit, term or rate would produce for you.
How to use the MYGA calculator
- Enter your deposit. This is the lump sum you would actually move into the contract, whether it comes from a maturing CD, a savings account or an old annuity you are exchanging.
- Choose your term. MYGA terms usually run from 2 to 10 years. A longer term typically locks in a higher rate but keeps your money committed longer.
- Type in a rate. Use a rate a strategist has quoted you, or test a round hypothetical number to see how the math moves.
- Set your tax bracket. The calculator uses this to show what you would net after tax if the contract were cashed out and taxed all at once, and to build a fair CD comparison.
The result shows your ending balance, total interest earned, an after-tax figure at maturity, how a CD paying the identical rate would finish once its interest is taxed every year, and a year-by-year table so you can see the balance build.
Why the rate you test actually matters
A rate that is off by even half a percentage point can swing a five-year projection on $100,000 by several thousand dollars, so it pays to use a realistic number rather than a rough guess. Rates change with the broader bond market and can move from one week to the next, which is exactly why we do not print a fixed rate table on this page. Instead, check the rate box above for where things stand today, or run the calculator with two or three rates side by side to see how sensitive your outcome is.
One more wrinkle: a small number of MYGAs advertise simple interest instead of compound. This calculator assumes annual compounding, which is how most MYGAs on the market actually credit interest and how the industry usually quotes rates for comparison. If a strategist quotes you a simple-interest product, ask for the compound-equivalent figure before you compare it here.
What is a MYGA?
A MYGA is a contract with an insurance company that pays one fixed rate for the whole guarantee period, generally 2 to 10 years. Think of it as the insurance industry's version of a CD, with two differences that usually work in its favor: the rate is often higher, and interest grows tax-deferred instead of being taxed each year. Your principal sits with the issuing carrier and gets a second layer of protection from your state's guaranty association. If you want a closer look at how the underlying math and tax treatment work, our fixed annuity calculator walks through the same mechanics from a slightly different angle.
Choosing your term
Shorter terms, in the 2- to 3-year range, keep your money reachable sooner and let you reinvest quickly if rates climb. Longer terms, 5 years and up, usually pay more and push the tax bill further into the future. Neither is objectively correct. The right term is whichever one matches when you will actually need the money.
A lot of buyers split the difference by laddering: putting separate deposits into a 3-year, a 5-year and a 7-year contract so something matures almost every year. Our guide to MYGA versus CD ladders walks through how that strategy plays out over time, and you can model each rung separately using the calculator above.
Getting a real quote
Once your projection looks right, the next step is finding out which carriers can actually deliver that rate for your term and state. A licensed strategist can shop your numbers against current MYGA offers from several top-rated companies at once, at no cost to you since the issuing carrier pays the strategist when a contract is placed. That way you are comparing real, current offers instead of a number typed into a calculator.
Before you sign anything, look past the headline rate to the whole contract: how long the surrender schedule runs, whether the carrier offers a bailout provision if the renewal rate drops sharply, and what the free withdrawal allowance looks like each year. Two MYGAs quoting the identical rate can differ quite a bit on those terms, and they matter just as much as the number on the illustration once your money is actually locked in.
Frequently asked questions
How is a MYGA different from a regular fixed annuity?
A MYGA locks a single rate for the entire term you pick, anywhere from 2 to 10 years. A traditional fixed annuity often only guarantees its opening rate for year one, then resets every year after that based on what the carrier declares. If someone is holding up an annuity against a CD, they are almost always talking about this locked-rate version.
What counts as a good MYGA rate?
Rates move with the bond market and change from one week to the next, so there is no fixed number that stays true for long. A useful test: a MYGA is worth considering when its guaranteed rate beats the best CD you can find for the same term. Open the rate box at the top of this page to see where things stand today, or ask a licensed strategist to check current offers in your state.
Do I owe tax on MYGA interest every year?
No. Interest builds up inside the contract without being taxed, and you only owe ordinary income tax once you actually withdraw it. That single feature is usually the biggest edge a MYGA has over a CD paying an identical rate, since a bank reports and taxes your CD interest annually whether you touch the account or not.
What if I need to withdraw from a MYGA before the term ends?
Most contracts let you take out interest, or sometimes up to 10 percent of the value, each year with no charge. Anything beyond that free amount inside the surrender period usually triggers a surrender charge, often starting somewhere near 7 to 9 percent and stepping down a bit every year until the term ends. Read the schedule in your contract, or our guide to annuity surrender charges, before you commit to a term longer than you might need.
Can I build a ladder out of several MYGAs?
Yes, and it is a common way to use this calculator. Buyers often split money across staggered terms, such as 3, 5 and 7 years, so one contract matures roughly every year or two. Each time a rung comes due you can reinvest at whatever the market is paying then, or take the cash penalty-free. Try running each rung through this calculator on its own to see how the pieces add up.
Sources
Educational only, not investment, tax or legal advice. Tax Free Wealth Plan LLC is a licensed insurance agency, not a registered investment adviser or broker-dealer. Annuities are not bank deposits, are not FDIC insured and are not guaranteed by any government agency. Guarantees are backed solely by the claims-paying ability of the issuing insurance company. Features, rates and availability vary by state and change over time; the contract and disclosure documents govern.