Safe Money Published: 2026-10-03

CD Alternatives: 5 Safe Places That Pay More or Stay Liquid (October 2026)

Written by Hans Goldstein, EA, independent licensed insurance producer · CA license 4273294 · NPN 20602398
Admitted to practice before the IRS
Published October 3, 2026

Short answer: the five safe CD alternatives are a MYGA (multi-year guaranteed annuity, 5.80% to 6.00% for 5 years at A-rated insurers), Treasury notes (5.06% for 5 years, state-tax free), Treasury bills, money market funds and high-yield savings. For money you will not touch for 3 to 7 years, a MYGA usually pays the most and defers the tax. For money you may need this year, T-bills or a money fund keep it liquid.

CD vs MYGA, after tax

What $100,000 earns in 5 years: CD vs MYGA, after tax

AmountYearsCD rate (%)Federal bracketState tax (%)

Rates used: CD 4.50%, the top nationally available 5-year CD (DepositAccounts, September 24, 2026); change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).

CD, interest taxed every year	$118,826
MYGA, tax-deferred, before tax	$133,507
MYGA after paying tax on all the interest at withdrawal	$126,136
Tax deferral alone adds about	$674
MYGA ahead of the CD, after tax	$7,310

Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge. In an IRA both grow tax-deferred, so the edge there is the rate alone. Bank and credit union deposits are FDIC or NCUA insured up to the limits; a MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.

CD alternatives compared (rates as of September 24 to October 2, 2026)

Option	Current rate	Backed by	Liquidity	Tax
5-year MYGA	5.80% to 6.00%	Insurer + state guaranty association	Usually 10% a year free; surrender charge above that	Deferred until withdrawn
5-year Treasury note	5.06%	U.S. government	Sell any day at market price	Federal yes, state no
1-year Treasury	4.46%	U.S. government	Matures in a year, sellable	Federal yes, state no
Top 5-year bank CD (baseline)	4.35% to 4.50%	FDIC to $250,000	Early withdrawal penalty	Taxed every year
Money market fund (7-day)	3.45% to 3.76%	Fund holdings, not insured	Daily	Taxed every year
High-yield savings	3.00% to 4.00%	FDIC to $250,000	Daily, rate can change any day	Taxed every year

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.

1. MYGA: the closest thing to a CD that pays more

A multi-year guaranteed annuity works like a CD issued by an insurance company: a fixed rate, locked for 2 to 10 years. The rate is guaranteed by the insurer, backed by its claims-paying ability, and interest compounds tax-deferred until you take it. On a 5-year term the gap over the best CDs is roughly 1.3 to 1.7 points. The trade-offs: no FDIC insurance (state guaranty associations instead, see are fixed annuities safe), a surrender charge if you take more than the free amount early, and a 10% IRS penalty on gains before 59½. For most retirees with money they will not touch for the term, this is where I start. Full comparison: MYGA vs CD.

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.

2. Treasury notes: the strongest backing

Treasuries are backed by the full faith and credit of the U.S. government and are exempt from state income tax, which matters in California. The 5.06% 5-year yield on October 2, 2026 is below MYGA rates but above most CDs, and you can sell before maturity (at a gain or a loss depending on rates). See 5-year Treasury vs 5-year MYGA.

3. Treasury bills: short money

Bills mature in 4 to 52 weeks. They suit cash you need within a year and want state-tax free. Compare in CD vs Treasury bills.

4. Money market funds

Government money funds pay a variable yield and let you move money daily. Not FDIC insured, and the yield falls when the Fed cuts. Good for a cash reserve, poor for locking a rate.

5. High-yield savings

FDIC insured and fully liquid, but the bank can cut the rate any morning. Fine for an emergency fund. See HYSA vs CD.

After-tax calculator: which alternative leaves you the most?

Amount ($)

Years

Federal bracket (%)

State tax rate (%)

MYGA rate (%)

Treasury yield (%)

CD rate (%)

Savings rate (%)

Simplified: CD, savings and Treasury interest taxed each year (Treasury federal only) and reinvested; MYGA compounds tax-deferred and all gain is taxed at the end at the same rates. Savings rate held constant, which it will not be. Not tax advice.

Your CD just matured: what to do this week

Most banks give a short grace period, often 7 to 10 days, before the CD rolls into a new one at the bank’s current rate. Decide before it lapses: money needed within a year goes to T-bills or a money fund; money for 3 to 7 years is where a MYGA or a Treasury note earns its keep. More on the mechanics in CD rollover options at maturity.

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 best alternative to a CD?

For money you will not need for 3 to 7 years, a multi-year guaranteed annuity (MYGA) usually pays the most, about 5.80% to 6.00% for 5 years at A-rated insurers in late September 2026, with tax deferral. For full government backing and no state tax, a Treasury note. For short-term cash, Treasury bills or a money market fund.

Is a MYGA safer than a CD?

A CD is FDIC insured up to $250,000 per depositor per bank. A MYGA is guaranteed by the issuing insurer, backed by its claims-paying ability and state guaranty associations, usually up to $250,000 per person per insurer. Both are low risk inside the limits.

What should I do when my CD matures?

Act during the bank's grace period, often 7 to 10 days, or it will roll into a new CD at the bank's current rate. Match the money to when you need it: T-bills or a money fund for under a year, a MYGA or Treasury note for multi-year money.

Are CD alternatives taxed differently?

Yes. CD, savings and money fund interest is taxed every year. Treasury interest is federally taxed but exempt from state tax. MYGA interest is tax-deferred until withdrawn, then taxed as ordinary income.

Sources

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

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.

Hans Goldstein is an Enrolled Agent, admitted to practice before the Internal Revenue Service. Not affiliated with or endorsed by the IRS. General education, not tax or legal advice for your situation.