A multi-year guaranteed annuity most closely resembles a bank CD. While the two are different – and offered by different institutions – the concept is similar. Only insurance companies offer MYGAs. They are purchased through agents and banks but offered and insured by large insurance companies.
MYGAs offer a guaranteed fixed rate for the term you choose. Two, three, and five-year annuity plans (like those listed above) are very popular. Just like a CD, your rate will not go below the percentage yield that is guaranteed at purchase. In fact, some have the ability to increase each year, but they do not go below the stated rate at issue.
Unlike CDs, fixed annuity policies allow you to withdraw your interest as income – or defer it for as long as you wish. And annuities offer higher rates of return than almost all comparable bank instruments offered today. The other piece of good news: Annuity rates are on the rise finally! We see significantly more interest in MYGA accounts now as their safe, insured, and guaranteed rates offer a great option when compared to more risky investments.
Working With A+ Rated Companies
With increasing interest rates comes competition. There are several highly rated insurance companies vying for deposits. The best way to earn your investments is to offer competitive rates while being a safe and secure company.
There are many agencies specializing in rating annuity insurance companies. You can look to AM Best, COMDEX, Moody’s, Standard and Poor’s, Fitch, and Weiss among others. These businesses comb through all of the financial metrics before assigning a grade. And these grades can go up or down based on several factors.
Fortunately, insurance companies are typically safe and secure institutions. Very few ever fail since they are not allowed to lend your deposits like banks. There are many rated at or near A+ offering some of the best yields. A few that you will see above are Reliance Standard Life, sister companies Midland and North American Life, Americo, Oxford Life, American National, Royal Neighbors, Pacific Guardian Life, Athene, Sagicor, Global Atlantic, and Aspida to name a few.