Both protect principal, but MYGAs often pay more and defer taxes. Call 1-800-MEDIGAP to compare.
How do annuity and CD rates compare in 2026?
In mid-2026, multi-year guaranteed annuities (MYGAs) generally outpay CDs. Top 5-year MYGA rates sit around 6.30 percent, while top 5-year CDs pay roughly 4.65 percent, according to industry rate trackers. MYGAs also grow tax-deferred, meaning you owe no tax until you withdraw, which can boost compounding versus a CD that taxes interest yearly. The tradeoffs: CDs carry FDIC insurance up to $250,000 and let you walk away at maturity with no surrender period, while MYGAs are backed by the insurer's financial strength and state guaranty associations and may charge surrender penalties for early withdrawal. To compare a current MYGA quote against your CD options, call 1-800-MEDIGAP.
Which is safer, an annuity or a CD?
Both are low-risk, but the safety nets differ. CDs are insured by the FDIC up to $250,000 per depositor, per bank. Fixed annuities are not FDIC-insured; instead they rely on the issuing insurer's financial strength and on state guaranty associations, which cover a limited amount (commonly $250,000, varying by state) if an insurer fails. To minimize risk with an annuity, choose carriers rated A- or higher and stay within your state's guaranty limit. For retirees prioritizing higher guaranteed yield with tax deferral, a MYGA from a strong carrier is competitive. Call 1-800-MEDIGAP to compare insured options.