Annuities Crush CD Yields On 3,5,7, & 10 Terms


MYIG fixed annuities (see definition below) beat the rates offered on CDs in 4 out 4 categories in January.

Most dramatically, the 10 year MYIG annuity yielded almost a full percent more than the comparable CD. The annuity provided a yield of 3.40% compared to only 2.45% for the CD. Also, the 5 year annuity provided substantially more yield than the 5 year CD. In the 3 and 7 year terms, the rates were much closer.


Here is our Free Tutorial on Annuities


To do this comparison, we did not use national averages.


We know the readers of LearnBonds are looking for the best rates. We compared top yielding CDs found on Bankrate and Money Rates to the highest yielding annuities. Here are the results


Term Top Yielding CD* High Yielding A Rated Annuity**
3 Years 1.08% 1.20%
5 Year 1.74% 2.60%
7 Year 2.76% 2.90%
10 Year 2.45% 3.40%

* 3 Year CD, First listed CD on Bankrate under national offer (CIT Bank),  5 year CD first listed under national on Bankrate  offers (Ally Bank), 7 Year, First listed CD on Money Rates (Pentagon Credit Federal Credit Union), 10 Year, First listed CD on Money Rates (Discover bank)
** 3 Year, Northern American Company Guarantee Choice 3, 5 Year, American Equity Investment Life Insurnace, Guarantee 5, 7 Year, Northern American Company Guarantee Choice 7, 10 Year, Northern American Company Guarantee Choice 10


What is a MYIG Fixed Annuity?


A Multi-Year Interest guarantee (MYIG) annuity is often called a called “CD-Type” Annuity. With a traditional fixed annuity, your interest rate can fluctuate. With a MYIG fixed annuity, the interest rate is set for the life of the annuity (or until your able to withdraw funds without penalty). In short, both a CD and a fixed MYIG annuity pay a fixed interest rate over pre-determined period time.

Both may have fairly large penalties if you need to access your money before the pre-determined period of time is over.


There are three differences that should be highlighted:


CDs are FDIC insured. Annuities are not insured by the federal government. However, the rates for all the annuities in the table come are A rated by AM Best.

Accessing money placed an annuity before the age of 59 ½ triggers large tax penalties. You can can move money from one annuity another without triggering penalties.

Fixed annuities including MYIG are tax deferred investments, similar to an IRA.

Additional Resources

Table of High Yielding CDs by Maturity Dates

Annuities Are Complex – Arrange To Have An Annuity Specialist Contact You


  1. Learn Bonds says

    Hi Gary,

    Thank you for your comment. Commissions and Fees vary depending on the annuity, provider and the broker used so we have not included them. With this being said you should certainly take them into account as part of any buying decisions.


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