Product Comparison Published: 2026-10-03

Fixed vs Indexed Annuity: MYGA or FIA?

Written by Hans Goldstein, independent licensed insurance producer · CA license 4273294 · NPN 20602398
Published October 3, 2026

Short answer: a fixed annuity (MYGA) pays a stated rate, for example 5.80% to 6.00% for 5 years at A-rated insurers in late September 2026, and you know the ending value on day one. A fixed indexed annuity (FIA) credits part of an index’s gain, limited by a cap or participation rate, with a 0% floor in down years. Neither loses principal to the market. The MYGA wins when you want certainty for a set term; an FIA can win over long periods if the index has several strong years and the caps stay generous. Most of my clients’ safe money goes to MYGAs.

Rate alert

Rates expire like milk.

The best MYGA, CD and savings rates change every few weeks. Get a short email when a rate on this page changes.

We’ll email you when a rate on this page changes. Hans Goldstein · NPN 20602398.

Rather talk it through? Or book 15 minutes on Hans’s calendar.

Side by side

	MYGA (fixed)	Fixed indexed annuity
How interest is set	Fixed rate, locked for the term	Formula tied to an index: cap, participation rate or spread, reset each period
Down market	Still earns the fixed rate	0% credit, no loss
Ending value known in advance	Yes	No, only the floor
Typical terms	2 to 10 years	5 to 14+ years of surrender charges
Can the company change terms?	Rate locked for the term	Caps and participation rates can be lowered at renewal, within contract minimums
Complexity	Low	Moderate to high (crediting methods, riders, fees)
Tax	Both tax-deferred; withdrawals taxed as ordinary income; 10% IRS penalty on gains before 59½

FINRA’s investor guidance is a fair read on how indexed crediting actually works (FINRA on indexed annuities).

Why I lead with MYGAs

For money that has to be there on a known date, a guaranteed rate beats a formula. You can compare MYGAs from different insurers in one line each: rate, term, rating, surrender schedule. FIAs are harder to compare because the caps that look good in year one can be reset later, and the longest-surrender products often carry the richest illustrations. Indexed annuities do have a place: long horizons, buyers who want some market-linked upside with a floor, or as the base for an income rider. I break down current FIA terms in fixed indexed annuity rates 2026.

MYGA vs FIA calculator (hypothetical index path)

Premium ($)

MYGA rate (%)

FIA annual cap (%)

Years

Index price returns by year, % (edit these)

The index path above is made up to illustrate the mechanics. It is not a history or a forecast. Uses annual point-to-point with a cap, 100% participation, 0% floor and no fees or riders; real contracts vary. MYGA default 5.95% = one A-rated insurer’s 7-year rate card effective September 25, 2026.

When an FIA can make sense

A horizon of 10 years or more and comfort with not knowing the exact result.
You want a guaranteed lifetime income rider (that is a separate decision with its own fee; see income rider fee vs payout math).
The cap or participation rate is high and the surrender period is one you are sure you can wait out.

Questions to ask before buying either

What is guaranteed in writing versus illustrated? How long is the surrender schedule and what does it cost in year 1, 3 and 5? Can caps be lowered, and to what minimum? What is the insurer’s rating? My full list: 20 questions to ask before signing. More on the fixed side in MYGA pros and cons.

Want a second opinion on your numbers?

Straight answer, no pressure.

Send your details and I’ll reply with current guaranteed rates from highly rated insurers for your amount and term, and a plain-English read on your situation. If what you have is already the right fit, I’ll say so.

Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.

Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple carriers

We’ll email it to you. Hans replies within one business day. Privacy Policy.

Frequently Asked Questions

What is the difference between a fixed and an indexed annuity?

A fixed annuity such as a MYGA credits a stated rate locked for the term. A fixed indexed annuity credits interest based on an index's performance, limited by a cap, participation rate or spread, with a 0% floor so you do not lose principal in a down year.

Is a MYGA better than a fixed indexed annuity?

For a set term where you want a known result, usually yes: the rate is guaranteed and easy to compare. An indexed annuity can earn more over long periods with strong index years and generous caps, but the result is unknown and caps can be lowered at renewal.

Can you lose money in an indexed annuity?

Not from index declines, because of the 0% floor. You can lose money to surrender charges if you withdraw more than the free amount early, and to rider fees that are deducted even in zero-credit years.

Are fixed and indexed annuities taxed the same?

Yes. Both grow tax-deferred, withdrawals of gain are taxed as ordinary income, and gains taken before 59 and a half generally owe a 10% IRS penalty.

Sources

Goldstein & Co. LLC dba Goldstein Insurance Services, CA lic. #4273294 · Hans Goldstein, NPN 20602398 · 213-414-2808 · hans@hansgoldstein.com

Rates: A-rated-or-better 5-year MYGAs 5.80% to 6.00% (AnnuityRateWatch carrier rate data, September 24, 2026); Treasury par yields from the U.S. Treasury for October 2, 2026; CD, savings and money market figures from DepositAccounts, bank and fund sites, September 23 to 25, 2026. Rates change often; confirm before you act.

This page is general education. It is not tax, legal or investment advice and is not an offer or recommendation for any specific product. Calculator results are estimates from the stated assumptions, not quotes. Guarantees in a fixed annuity are contractual and are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are not FDIC insured. Annuities have surrender charges and other limitations; read the contract and disclosure before you buy. Consult a tax professional or attorney about your situation.