Multi-Year Guarantee Annuities or MYGA’s GUARANTEE your principal and offer a guaranteed rate of interest for a specified period of time that you select. You give a specific amount of money to an insurance company, and the insurer guarantees that your investment will earn a specific rate of compound interest for a specific number of years. MYGA annuities are often called CD-type annuities or tax-deferred CDs because they serve a similar purpose as a certificate of deposit (a CD is a security purchased at a bank that pays a fixed rate of interest for a specific number of months or years). The beauty of MYGA’s is their transparency – what you see is what you get. You know the rate of interest your money will earn and how long it will earn that rate.
MYGA’s are typically used to safely grow and accumulate funds. There is no market risk in MYGAs and again the growth is guaranteed. For that reason, MYGAs are used for the conservative portion of a portfolio. MYGA’s have several strengths over bank CDs. The most obvious strength is that fixed interest rates tend to be significantly higher for MYGA’s. Another key advantage is that MYGA’s grow funds on a tax-deferred basis. What does tax deferral mean? It means you do not have to pay taxes on gains each year. Earnings grow tax-deferred within the annuity and no taxes are due until funds are withdrawn.
Please review the main Annuities page for more information. Don’t wait to boost your savings potential, call our office today for a quote to see how much you can Safely earn on your nest egg!