Locking In Up To 9.65% In Year 1: What Happens After With A 6-Year Annuity?

Treasuries, agencies, and even an up to 9.65% 1st year “teaser rate” on a multi-year guaranteed annuity (MYGA) - might these be something for you? 

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And up to 9.65% first year teaser rate on a multi-year guaranteed annuity or MIGA. Might this be something for you? Hello, Diamond Estec Members, Super Savers and Course fans. I hope you're healthy and well. So 5% safe and guaranteed seems to be the magic number that many of our fixed income regulars often say would make them happy and sleep well at night. The catch, of course, is that in today's environment, 5% plus returns aren't easy to find if you want them safe and guaranteed for let's say five years or longer. In fact, in our mind, you really only have two options here if you're a safety conscious investor who's trying to build your base. Your first option is bonds backed by the US government, such as Zero Coupon Treasuries, also known as strips, and non-callable agencies, and maybe normal treasuries. However, at the time of this taping, on May 2nd, 2026, you may have to go out to 20 years or more to really get to 5%. And your second option is multi-year guaranteed annuities or MIGAs, which may pay 5% plus rates for your medium and long-term investments and are guaranteed as long as you stay within the limits of your state guarantee association. If you're willing to take on more risk, there are other options, of course, such as non-callable corporate bonds or munis, but these are not guaranteed and may carry different degrees of risk. So let's set them aside for today's video and focus on treasuries and agencies, as well as multi-year guaranteed annuities or migas. Migas in particular may be a good tool to lock in 5% or more for medium and long-term money at the current time. That said, and while annuities are safe and guaranteed, they may also be complex and illiquid. And as Marcus and I always say, don't buy something you don't understand. So with that in mind, here are the three topics that we'll be covering today. And we're going to kick off with the best rate that we found for you this week. One, how would an up to 9.65% first year teaser rate on a multi-year guaranteed annuity or myga work? And what key questions might you want to ask beforehand? Depending on your state of residence and other factors, this up to 9.65% first year teaser rate may be available via our trusted annuity specialist at the time of the taping on May 2nd, 2026. So email us at jennifer at diamondnestic.com if you want to see where things stand at the time that you're watching this video. Two, what investment amounts and maturities do you need to get a 5% or higher myga rate with some of the highest rated insurance companies? And three, what might your options be if you want treasury and or agency bonds that pay 5% plus? Let's dive in now, folks. How would an up to 9.65% first year teaser rate on a multi-year guaranteed annuity or myga work? And what key questions might you want to ask beforehand? A teaser rate on a MIGA is basically an introductory interest rate for a specific period of time, say one or two years, that's higher than the rate you'll receive for the rest of the term of the annuity. Insurance companies use teaser rates on annuities to make them more attractive. Think of it like the booster rates that are sometimes offered by banks if you open a new high yield savings account and keep new funds with them for a specific number of days or months. So at the time of this taping on May 2nd, 2026, there is a teaser rate of up to 9.65% on a six-year MIGA with an A-rated insurance company. In this column, we have the minimum investment amount. In this column, we have the teaser rate for year one. And in this column, we have the base rate for years two through six, which brings us to this next column as well as the first question you might want to ask beforehand when it comes to a teaser rate. What is my average annual yield over the entire six years? Because as attractive as the teaser rate in year one may be, if the base rate for years two through six is substantially below market, your average annual yield over the term of the annuity here may also end up being significantly less attractive than you had originally expected. And in the last column, we have the ending value at maturity, how much cash you will get paid out from your initial investment at the end of the six years. Don't forget mygas don't pay out regular interest. So it all comes in one big lump sum payment at maturity. So for this six-year annuity with this A-rated insurance company, if you invest a minimum of$10,000, your teaser rate for year one might be 9.4%, and your base rate for years two through six might be 4.4%, giving you an average annual yield over six years of 5.22% and an ending value at maturity of$13,568. If you invest a minimum of$100,000, your teaser rate for year one might be 9.5%, and your base rate for years two through six might be 4.5%, giving you an average annual yield over six years of 5.32% and an ending value at maturity of$136,457. And if you invest a minimum of$250,000, your teaser rate for year one might be 9.65%, and your base rate for years two through six might be 4.65%, giving you an average annual yield over six years of 5.47% and an ending value at maturity of$344,068, which in my mind are pretty nice sums here. But as I mentioned earlier, there are some key questions that you might want to ask beforehand in this situation. We covered the first one already. What is the average annual yield over the life of the myga? That's this column here with the above 5% yields for this six-year MIGA that we've been discussing. Because remember, when you see a high teaser rate for the first year or so, always make sure you understand the average annual yield over the entire period as well to make sure the investment doesn't end up being much less attractive than it initially looked after all's been said and done. Question two: Can you withdraw some money from this myga if you need it before maturity? So, this illustrative example that we just walked through is for an annuity that allows a 10% penalty-free withdrawal every year. 10% per year is more or less standard when it comes to mygas. If you're 100% certain that you will not be withdrawing anything from your myga before the term ends, this is something that you should tell your trusted annuity specialist beforehand because some insurance companies may offer an additional bump up for the rates if you lock up the entire amount until maturity. But I do have to reiterate, you need to be 100% certain that you do not need to pull any money out of your myga before maturity in such cases, that you have a bountiful emergency reserves to dip into in the worst case, because this really is usually one of those no way out until the term end scenarios. Personally, I don't feel it's good enough to say I'll take the higher rates because I don't think I'll need the money until maturity. You have to know for sure that you won't be needing that money at all. And as usual, if you like the rates you see in this illustrative example, or if you want to see what teaser rates are available whenever you're watching this video, email us at jennifer at diamondnestic.com so that we can connect you with our trusted annuity specialist who can help you find the annuity solution that best suits your personal situation. And especially if you live in New York, because as so often in life, we New Yorkers seem to be special, for better and for worse, I guess. In any case, this product and these rates here are not available in New York. So our trusted annuity specialist can walk you through what the special rates might be in the state, if any. Moving on now to question three. What happens when your myga matures? Don't just assume that at maturity your funds will automatically be dispersed to you via a check, bank transfer, or some other means. Think of it more like how many bank CDs work. At maturity, they may automatically roll over into a new CD at the then prevailing market rates, unless you ask for your money back beforehand. So, with this illustrative example, for instance, after the six-year MIGA matures, it automatically rolls over into another four-year MIGA, the rate of which will be set by the insurance company based on the then prevailing market rates, with some sort of guaranteed minimum rate that should be written into the annuity contract before you sign. This guaranteed minimum rate will typically be significantly lower than the teaser rate and base rate. There is usually a 30-day renewal window at the end of the myga term, during which time you can cancel the automatic renewal. But if you were to miss this 30-day renewal window, your money will be locked in for another four years, turning what should have been a six-year MIGA into a 10-year MIGA basically. So make sure you know what happens to your myga at maturity and that you don't miss any renewal window at the end that will lock you in for longer than you had originally planned for. Beyond these three key questions here, though, and as with all annuities, you should also be sure you understand the potential surrender charges on early withdrawals outside your penalty-free amount, as well as any other terms, conditions, and restrictions. Plus, as always, remember that annuities are designed to give you safety and predictability. Other investments may be more suitable if you're looking for inflation protection, growth, andor liquidity. Keep in mind that the MIGA rates and minimum investment amounts in this table are dependent on a number of factors and subject to change at any time without prior notice, and that your personal rate is not fixed before you sign your annuity contract. So, as we already touched upon, the up to 9.65% first year teaser rates in this illustrative table is from an A-rated insurance company that our trusted annuity specialist works with. Now, according to AM Best, a ratings agency that specializes in the insurance industry, an A-rating is in the excellent category, as you can see here. And as long as you stay within the limits, you have the additional protection from your state guarantee association. That said, I know that quite a number of our Diamond Nest Eggers would rather err on the side of caution with their annuities and go with an insurance company that is rated even a notch or two higher in the superior category, so A or even A double plus. So on that note, let's move on to the next part of today's discussion. What investment amounts and maturities do you need to get a 5% or higher myga rate with some of the highest rated insurance companies? So let's compare some illustrative sample myga rates from two other insurance companies that we work with, an A rated one and an A plus rated one. Remember that A is the best credit rating that an insurance company can get from AM Best, meaning the MIGA from the A double plus insurance company that we're about to share with you are the lowest risk, making them the most comparable to Treasuries in terms of risk return profile. And A plus is the second best credit rating that an insurance company can get from AM Best. So still very safe in the overall big picture, generally speaking, but maybe not as safe as Treasuries, especially if you were to go above the protection limits of your State Guarantee Association. In this top section, we'll go through what the numbers look like for an A double plus insurance company. And in this bottom section, we'll go through what the numbers look like for an A plus insurance company. Here you have the investment amount required, and here you have the guaranteed myga term from two year all the way up to seven year for the A double plus insurance company. And for a three-year myga, five-year myga, and a seven year myga for the A plus insurance company. Rates on the two-year migas are up 30 basis points from last week from this A double plus insurance company. Rates on the three-year and four-year mygas are unchanged. And rates on the five-year, six-year, and seven-year migas are also up by ten basis points. So, for example, if you were to purchase a$10,000 seven-year myga at the time of this taping from this AA plus insurance carrier, your rate might be 4.6%. A$50,000 seven-year myga might earn you 4.7%. A$100,000 seven-year myga might earn you 4.85%. And a$1,000 seven-year myga might earn you even 4.9%. And if you have more than the amounts shown here, say north of$10 million, your rate might go as high as 5% with this A double plus insurance carrier this coming week. As always, keep in mind that the myga rates in this table are illustrative and subject to change at any time without prior notice, and that your personal rate is not fixed before you sign your annuity contract. For the A plus insurance carrier, the rates are higher across the board, as you can see here. You may be able to get to 5% even with a$10,000 myga purchase if you have a time horizon of seven years. And with$100,000, you may be able to get to 5% with a three-year myga, 5.2% with a five-year myga, and even 5.3% with a seven-year myga. Higher risk, higher return, right? But as I always say, everyone's financial journey is different. And an A rated insurance company is still the second best credit rating that an insurance company can get from AM Best, as I mentioned earlier. And as always, stay under your State Guarantee Association's threshold. So if any of these rates are interesting to you, or if you want to see what your MIGA options might look like whenever you're watching this video, email us at jennifer at diamondnestic.com so that we can connect you with our trusted annuity specialist who can help you find the best annuity that's out there for you. Now, let's say that you're looking for a safe and guaranteed 5% plus return on your money with principal protection. But perhaps you want to go above the protection limits of your State Guarantee Association. Or maybe you don't like the illiquidity of migas. Because remember, one of the main reasons why migas usually pay more than treasuries is due to the fact that they are not liquid like treasuries. Bringing us nicely to the next part of today's discussion. What might your options be if you want treasury and or agency bonds that pay 5% plus? In the current environment, if you want to earn 5% or more with treasuries and or agencies, you may need to go two to three decades out in terms of maturity, and you may need to be opportunistic here. For example, the 20 and 30 year treasuries did get very close and even crossed 5% this past week, as you can see from this screenshot from Fidelity Summary Bondi Table per May 2nd, 2026. But the market remains fickle. So even if you're fine with the longer time to maturity of the 20 and 30 year treasuries, you'll still have to watch the market fairly closely, like a trader would. Be prepared for minimum purchase requirements that may be more than the standard$1,000 that some of you might be used to at auction. And be ready to pounce like a tiger on the secondary market as soon as you see the 5% number. The same applies in principle to agency bonds. You may need to look at the longer maturities, stay fairly close to the market, and act opportunistically. But even worse in the context of today's video is that it may be hard to really lock in attractive agency rates for the medium and long term. From what we've seen recently, non-callable agency bonds may be hard to find. You just might need to accept that many, if not most, of the higher yielding agency bonds are generally callable, like the ones on this list here from Fidelity's platform at the time of this taping on May 2nd, 2026. So if we take this highest yielding one here from Federal Farm Credit Banks, which requires a not completely unreasonable minimum purchase quantity of$5,000 par value, yes, it has a yield to worst of 5.587%. But it is callable in about a year's time, meaning that in the best case scenario for long-term investors, you might get this 5.587% until this bond matures in 2046. But in the worst case scenario, you may not really lock in the rate, but only get it for a bit under 12 months until the next call date on April 2027. Now, for the right investor, these may be attractive returns, but if you want to lock in your rates for the long term, which is the focus of today's video, early callability really defeats the purpose. Please also keep in mind that when you buy your agency bonds on the secondary market, like the ones on this list, for example, from Fidelity's platform, there is usually a fee of a dollar per$1,000 par value, which will reduce the yield numbers shown here. As always, in life, money, and investing, there are trade-offs to be made. Yes, you may be able to lock in some attractive rates with treasuries and the rare non-callable agency bond if you can find it. And they are more liquid, but you may need to have a much longer time horizon. Enjoy watching the market for the next 5% fixed income opportunity to pop up, and be comfortable buying bonds on the secondary market. Mygas are less liquid, and you should stay within your state guarantee associations limits. But you may be able to lock in attractive rates with well-rated insurance companies, as we've shown you already, including this up to 9.65% first year teaser rate and 5.47% average annual yield over six years with this A-rated insurance company at the time of this taping. Everyone's financial journey is different though, as I just mentioned, and it's rarely all or nothing in money and investing. There's no rule that says you can't mix and match. Have a part of your fixed income portfolio in treasuries, agencies, and maybe some other types of bonds, and the other part of your fixed income portfolio in migas and perhaps some other types of annuities. Check out these annuity videos here to learn more about whether a myga or some other type of annuity might be something for you. Or email us at jennifer at diamondestic.com so that we can connect you with our trusted annuity specialist, who can help you find the best annuity out there for you right now before rates come back down again. Alright, Diamond Essex members, Super Savers and Course fans, I hope you enjoyed today's video and learned something new. And see again very soon with more brand new wealth-building content for your financial journey.