Maximize Earnings & Minimize Taxes With a Smarter Alternative to CDs

The CD Alternative: How to Earn More and Pay Less in Taxes with a MYGA

If you're holding cash in a bank CD, you probably value safety and predictability. CDs are simple and insured, which makes them a popular option for conservative savers. But in today’s economic environment, one thing is clear: traditional CDs just don’t cut it anymore when it comes to growth or tax efficiency.

That’s where MYGAs—Multi-Year Guaranteed Annuities—come in.

A MYGA is a fixed annuity that acts much like a CD, but with greater fixed returns and tax advantages. While your principal is protected and your rate is guaranteed for a set period, you’re also able to defer taxes on the growth inside the annuity. That means your money compounds uninterrupted while staying shielded from market swings.

Why More Savers Are Moving Away from Traditional CDs

Bank CDs offer a guaranteed interest rate for a fixed period, usually 1 to 5 years. The problem is, those rates are often underwhelming. And worse, the interest you earn is typically taxed each year, even if you don’t withdraw the money. Which adds to your taxable income, and eats into your compounded returns.

With MYGAs, you still get that fixed, guaranteed rate, but without the annual taxation. Instead, you only pay taxes on the interest when you withdraw it or when the contract ends. That’s a big deal. It gives your money time to compound without being chipped away by taxes every year.

And if your MYGA is inside a qualified retirement account like a traditional IRA, the growth is also tax-deferred, but keep in mind, you’ll pay taxes on the entire withdrawal (not just the interest), just as you would with any qualified account.

So whether you use after-tax money or retirement funds, the tax treatment of MYGAs is built for efficiency.

Same Safety, Better Growth

Many people are surprised to learn that MYGAs are also insured, just like bank CDs. But instead of FDIC insurance, they’re backed by state guaranty associations, which cover policyholders up to certain limits. So you're still in safe hands, just through a different regulatory structure.

What really sets MYGAs apart, though, is how competitive they’ve become. Some insurance companies are offering 4%–6% guaranteed interest for terms ranging from 2 to 10 years. Others are even offering bonuses on contributions or enhanced income options after the contract matures. In other words, the landscape is evolving, and CDs haven’t kept up.

Tax Deferral: The Silent Advantage

Tax deferral may not sound exciting, but its impact on your long-term savings is powerful. Imagine earning 4%–5% on your money for five years and not having to report any of it as income until you choose to withdraw it. That means more compounding. More flexibility. Less tax pressure in the short term.

And if you're near retirement, deferring income now could help you stay in a lower tax bracket until you're ready to draw from the account.

That’s something bank CDs simply can’t offer.

Who Should Consider a MYGA?

If you're conservative with your savings but want more growth than CDs and tax advantages, a MYGA may be worth considering. It’s a good fit for people looking to:

• Grow money safely for 2–10 years

• Delay paying taxes on interest

• Protect principal while earning competitive fixed returns

• Add predictability to a retirement income strategy

Even if you already have money in CDs or other fixed-rate products, it might be worth comparing them side by side.

Final Thoughts

Bank CDs still have their place, but they’re not always the best option. If you're looking to maximize your interest earnings and maximize tax efficiency, a MYGA might be exactly what you need.

These contracts are simple, secure, and surprisingly powerful when used strategically, especially in a high-tax or low-rate environment. And since MYGAs can be used with both retirement accounts and non-retirement accounts, they’re flexible enough to fit into most financial plans.

Watch the Short Video to Learn More

Want to see this concept in action?

Click the image to watch a quick 2-minute video that explains how this strategy works, and why more people are rethinking their CD savings.

Ready to Explore Your Options?

If you're curious whether a MYGA fits your situation, or if you're simply wondering if your current savings strategy could be more efficient, book call below.

You deserve to earn more on your safe money without overpaying on taxes.