MYGA vs Fixed Index Annuity: Which Fits Your Retirement Savings
Trever Dahms • 3 August 2026
Two Different Tools for Two Different Goals
Clients often come to me asking about annuities without knowing there are different types built for different purposes. Two of the most common are Multi-Year Guaranteed Annuities, or MYGAs, and Fixed Index Annuities, or FIAs. They're both about protecting principal, but they work differently.
MYGA: The CD Alternative
A MYGA works a lot like a bank CD. You deposit money, it earns a fixed interest rate for a set period of time, usually 3 to 10 years, and then the term ends and you decide what to do next.
• Fixed, guaranteed interest rate for the entire term
• Simple and predictable, no market involvement at all
• Often higher guaranteed rates than bank CDs
• Good fit for money you want to grow safely without any complexity
Fixed Index Annuity: Growth Potential With Protection
An FIA also protects your principal, but instead of a fixed rate, your growth is linked to the performance of a market index.
• Growth potential tied to index performance, with a floor that protects against market losses
• More complex, often with caps or participation rates limiting upside
• Many FIAs offer optional income riders for guaranteed lifetime income
• Good fit for those who want more growth potential than a MYGA, with principal still protected
How I Help Clients Decide
If you want simple, predictable, guaranteed growth with no complexity, a MYGA usually wins. If you're comfortable with a little more complexity in exchange for more upside potential, and possibly a guaranteed income stream down the road, an FIA is worth a closer look.
The right answer really depends on your timeline, whether you'll need income from this money, and how much complexity you're comfortable with. I work with a wide range of carriers, so we can compare real numbers side by side instead of guessing. Let's set up a time to look at your specific situation.
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