MYGA Growth Calculator — End Balance, Monthly Interest, Side-by-Side Rate Compare
TL;DR: Plug in your deposit, your MYGA rate, and your term length. Instantly see the end balance, total interest, average monthly interest, and yearly taxable interest. Compare two carriers side-by-side to see how a half-point rate difference compounds over 3 to 10 years. Compounding defaults to monthly (industry standard for MYGAs).
How this calculator works
This calculator uses the standard compound interest formula with adjustable compounding frequency:
FV = P × (1 + r/m)^(m×n)
- P = principal deposit
- r = annual MYGA rate (as a decimal — 5.85% = 0.0585)
- m = compounds per year (12 for monthly, the carrier default)
- n = term in years
Monthly compounding produces an effective annual yield slightly higher than the nominal rate. A 5.85% nominal rate compounded monthly equals an effective annual yield of about 6.01%. The calculator handles this automatically — you enter the nominal rate (what the carrier advertises) and it returns the actual end balance.
The side-by-side comparison runs the same math against a second rate so you can see exactly what 25-50 basis points of rate difference costs you over the full term. On $250,000 over 5 years, a half-point rate swing is typically $7,000-$9,000 of ending value — far larger than most buyers expect.
What the result means
The big number is your guaranteed end balance, assuming you don't withdraw anything and the carrier honors the contract (A-rated carriers have a 99.9%+ payout history backed by state guaranty associations).
Total interest is the dollar gain above your deposit. Inside a non-qualified MYGA (taxable money), this gain is tax-DEFERRED — no 1099-INT generated each year. You pay tax only when you withdraw, and only on the gain portion. Inside an IRA, it's already tax-deferred, so the MYGA is purely a rate vehicle.
Monthly interest (average) is what you could pull out each month if you elected interest-only withdrawals via the carrier's 10% free-withdrawal allowance — without touching principal.
Yearly taxable (average) is the average annual gain. For non-qualified MYGAs this is shown for planning only — you don't actually report it each year. For qualified MYGAs in IRAs, all withdrawals are taxed at ordinary income at distribution.
Rate advantage shows the dollar difference between two rates over the full term — useful when comparing two carrier quotes head-to-head.
When MYGA wins / when the alternative wins
MYGA wins over CDs when: you have 3+ years until you need the money, you're in a 22%+ bracket (the tax deferral matters), and you don't need monthly liquidity beyond 10%/yr.
CDs win when: you might need full principal access before maturity, you're in a 0-12% bracket (deferral barely matters), or you want FDIC vs state-guaranty-association coverage.
Treasuries win when: you're in a high state-tax state (CA, NY, NJ, OR) and want federally-taxable-only income. T-bills inside a 5-year ladder typically run 50-100 bps below top MYGA rates but eliminate state tax on the yield.
Fixed annuity with income rider wins when: you don't actually need a guaranteed pile of cash — you need a guaranteed lifetime paycheck. That's a different product (see our payout calculator).
Worked example
Scenario: 64-year-old in CA sells a rental, has $300,000 to park for 5 years before starting Social Security.
- Deposit: $300,000
- Rate A: 5.85% (top A-rated MYGA, June 2026)
- Rate B: 4.95% (3-yr brokered CD, well-known bank)
- Term: 5 years
- Compounding: monthly
Rate A end balance: $401,300 — gain $101,300 over 5 years. Tax-deferred (no annual 1099).
Rate B end balance: $383,800 — gain $83,800, but taxed yearly at ~37% combined (24% fed + 9.3% CA + 3.8% NIIT). After-tax compound rate is actually closer to 3.10%, dropping end balance to ~$350,000.
Real after-tax delta favoring MYGA: ~$51,000 over 5 years. That's the whole point of running this before signing the CD paperwork.
Common mistakes
- Forgetting to ask about renewal. MYGAs with auto-renewal can roll at the new prevailing rate (often lower). Always confirm the renewal-rate language before signing.
- Confusing "interest credited monthly" with "monthly payments to you." Compounding is internal; payments are an election you have to make at issue or via the 10% free withdrawal.
- Using a CD rate as your "alternative" without adjusting for tax. The MYGA-CD gap usually doubles after tax for anyone in a 22%+ federal bracket plus state tax.
- Ignoring carrier rating. A B+ carrier paying 6.10% vs an A-rated 5.85% — the extra 25 bps doesn't compensate for the rating gap on a 5+ year contract.
- Mixing nominal and effective yield. Some carriers quote the nominal rate; others quote APY. Run the math both ways before comparing.
Related calculators & reviews
- MYGA vs CD After-Tax Calculator
- MYGA Monthly Income Calculator
- Annuity Payout Calculator
- Social Security Bridge Calculator
- RMD + Annuity Calculator
FAQ
Q: Is the rate I see at quote locked in for the full term?
A: Yes. A true multi-year guaranteed annuity (MYGA) locks the credited rate for the entire surrender period. Watch out for products labeled MYGA but with a 1-year guarantee and renewals after — those are different.
Q: Is the interest taxed every year?
A: Not on non-qualified MYGAs. Interest compounds tax-deferred; you pay tax only when you take a withdrawal, and only on the gain portion. Inside an IRA, all withdrawals are taxed at ordinary income.
Q: What's the catch with the higher MYGA rate?
A: Surrender charges. You're committing to keep the money for the full term (typically 3-10 years). Most carriers allow a 10% free withdrawal annually; anything beyond triggers surrender fees on the schedule.
Q: Can I add money later?
A: Generally no — MYGAs are single-premium products. You'd open a second MYGA with new money.
Q: What happens if I die during the term?
A: Account value (principal + accumulated interest) passes to your named beneficiaries with no surrender charge. They have options: lump sum, 5-year payout, or stretch over their single-life expectancy.
Q: Why is monthly compounding shown by default?
A: Most MYGA carriers credit interest monthly internally even though the rate is quoted annually. Monthly compounding gives a slightly higher effective yield than annual — e.g., 5.85% nominal = 6.01% APY.
Q: Are MYGA rates better than CDs right now?
A: As of mid-2026, top MYGAs run 100-200 bps above same-term CDs from major banks. The gap widens with term length and tax bracket.
Run the numbers? Get my second-opinion review.
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Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Disclosure
This calculator is for educational and illustrative purposes only and is not a personalized recommendation, solicitation, or offer of any specific product. Outputs are approximations using publicly available rates, IRS tables, and standard payout factors as of 2026; actual carrier illustrations may differ. Annuity rates, caps, payout factors, surrender schedules, and tax brackets change frequently. Always confirm current values against the most recent carrier disclosure document, IRS Publication 590-B, and the actual contract before purchasing. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers. Tax discussion reflects federal law as of 2026 and is subject to change. Consult a CPA and licensed advisor before acting on any output shown.