FIA vs. MYGA: Which Fixed Annuity Type Fits You?

Example content created during the Phase 2 migration. Numbers below are illustrative.

Most buyers comparing fixed annuities are choosing between two shapes:

• MYGA — multi-year guaranteed annuity. Pays a fixed rate for a fixed term.
• FIA — fixed indexed annuity. Credits a portion of an equity index’s return, with a floor of 0%.

Both protect principal (subject to carrier solvency). The choice usually comes down to certainty versus upside.

When a MYGA makes more sense

• You want a known rate you can underwrite against.
• Your planning horizon lines up with a 3-, 5-, or 7-year guarantee.
• You do not care about equity-like upside inside this bucket.

When an FIA makes more sense

• You want the possibility of crediting above a MYGA while still floored at 0%.
• You can tolerate years with a 0% credit (they happen).
• You will read the renewal cap / participation history, not just the launch cap.

What they share — and how to compare

Both products use surrender charges, sometimes MVAs (market value adjustments), and usually allow a 10% free withdrawal per year. When comparing two quotes:

1. Normalize the surrender schedule (a 7-year FIA vs a 5-year MYGA is not apples-to-apples).
2. Check the carrier’s financial-strength ratings (A.M. Best, S&P, Moody’s).
3. For FIAs, read the renewal cap floor, not just the current cap.

Bottom line

MYGA sells certainty. FIA sells bounded upside. Don’t let a teaser cap or a bonus obscure the contractual minimums — those are what you actually own.