Fixed Deferred Annuities Have Gotten Better, and Investors Noticed

Written by Hersh Stern Updated September 16, 2025

Over the past few years fixed-deferred annuities, also called Multi-Year Guarantee Annuities or MYGAs, have gotten much more popular. Find out why investors are flocking to MYGAs and figure out if one might be right for you too.

Are Multi-Year Guarantee Annuities Popular?

Yes, MYGAs continue to grow in popularity seeing huge increases in sales. In fact, according to LIMRA, fixed-deferred annuity sales are up 52% compared to three years ago. Additionally, almost all annuity products have been increasing in popularity recently.

The reason that annuity buyers are giving for their increased interest in MYGAs has to do with the safety of the annuity product. People are becoming more interested in MYGAs because they are considered safe, conservative investments that won’t decrease in value. While consumers are valuing safety over maximizing their gains, they are still looking for the best gains they can find with a secure product. This is what differentiates MYGAs from CDs.

Why are people investing in MYGAs?

People who are looking for secure products that offer guaranteed interest rates are buying MYGAs. After all, that’s exactly what a MYGA does: it pays a guaranteed interest rate over a specified term. There’s no guesswork or market volatility involved. And the reason that people are choosing MYGAs to invest in, compared to similar products such as CDs, has to do with rates. That’s right, it’s all about getting the most value.

When LIMRA compared MYGA annuity rates against CD rates over a five-year period, MYGAs consistently outperformed CDs. On top of that, LIMRA indicated that annuity rates have gotten more and more competitive against CDs in the past several years. That means that the guaranteed rates MYGAs offer have only gotten better when compared to CD rates.

Why are MYGA rates better than CD rates?

Given that MYGAs and CDs are so similar, let’s dive into why MYGAs tend to offer better interest rates. The reason for this is that MYGAs are issued by insurance companies, who tend to have more diverse holdings with bigger margins, allowing them to offer more competitive rates. While banks, which normally issue CDs, typically profit from their outstanding loans, insurance companies (which issue MYGAs) invest in loans, bonds, mortgages, real estate, stocks, etc. and can offer higher rates of return for their products.

While insurance companies do invest in stocks, which are subject to market volatility, it is important to remember that stocks represent a small amount of their portfolios on average (approximately 13%) while bonds occupy a much larger share (about 60%). We suggest that you check the rating of the insurance company you are interested in buying an annuity from.

Are MYGA annuity rates good?

For many people, investing is a balancing act of maximizing their earnings while staying within their comfort zone for risk. And with annuities, you may be wondering if rates are even good right now.

At the time of this article, annuity rates are more competitive now than they have been in the past. The reason for this is the increase in the overall interest rate environment. As rates increased, insurers were able to raise their rates for their fixed-rate annuities, offering retirees better earnings. If you’re interested in how market influences affect annuity rates, check out our annuity trends page.

What other features do people value in MYGAs?

While the primary draw to MYGA annuities for retirees and other investors is their guaranteed interest rates, there are other features that add to their value. We’ll go over some of the other common features that retirees enjoy about MYGAs. However, it is important to emphasize that not all MYGAs have these features. Make sure to check the individual features of any annuity product before making any decisions to purchase it. If you need help, call our annuity experts at (866) 866-1999.

Here are some common features people like about MYGAs:

• Tax Deferral - taxes are not owed each year on a MYGA, only when you remove money from the annuity status
• 1035 Exchanges - hand-in-hand with tax deferral, annuity owners can transfer their account value to a new annuity via a 1035 exchange, maintaining their tax deferral.
• Beneficiaries - you can set up beneficiaries within your MYGA policy, allowing you to exclude the money inside of your annuity from the laborious inheritance estate process.
• Discretionary Withdrawals - many MYGA products allow for limited discretionary withdrawals. This means you can access some of your money if you want to.
• Annuitization Options - You can annuitize your MYGA which will essentially turn your account value into a guaranteed, lifetime income stream. Some policies allow you to do this within your MYGA, or you can perform a 1035 exchange to an Immediate Annuity.

Is a MYGA right for me?

This is a question that a lot of people ask us. While we cannot definitively answer this question, we can help you understand how a MYGA can help you achieve your retirement goals, while also showing you where it may fall short. If you call our annuity experts at (866) 866-1999, we’ll give you honest answers to your annuity questions and help you find the best MYGA for your situation.

References:

• “LIMRA: Why Fixed-Rate Deferred Annuity Sales Tripled in Two Years” LIMRA, published February 20, 2024. Retrieved September 9, 2025 from https://www.limra.com/en/newsroom/industry-trends/2024/limra-why-fixed-rate-deferred-annuity-sales-tripled-in-two-years/
• “LIMRA: U.S. Annuity Sales Exceed $100 Billion for Seventh Consecutive Quarter” LIMRA, published September 4, 2025. Retrieved September 15, 2025 from https://www.limra.com/en/newsroom/news-releases/2025/limra-u.s.-annuity-sales-exceed-$100-billion-for-seventh-consecutive-quarter/
• Wong, Michele. “Capital Markets Special Report” National Association of Insurance Commissioners. Published May 2025. Retrieved September 1, 2025 from https://content.naic.org/sites/default/files/capital-markets-special-reports-asset-mix-ye2024.pdf