Last updated: March 2026 | Reviewed by: AnnuityJournal Editorial Team
A 1-year MYGA is the annuity industry’s best-kept secret for cautious savers — and it’s consistently outperforming 1-year CDs right now. If you’re parking cash for 12 months and want a guaranteed return without locking up your money for 3–5 years, here’s what’s available and whether it actually makes sense for your situation.
Best 1-Year Fixed Annuity Rates (March 2026)
Rates shown are for informational purposes only and subject to change without notice. Only carriers rated A− or better by AM Best are included. Products marked SI use simple interest — the effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) funds. Always verify current rates with a licensed annuity broker before purchasing.
Rates updated weekly from our carrier network. To see the full rate comparison across terms, visit our best MYGA rates page.
How 1-Year MYGAs Compare to 1-Year CDs
The 1-year MYGA and the 1-year CD are functionally similar — you deposit a lump sum, earn a guaranteed interest rate, and access your money when the term ends. The differences matter:
| Feature | 1-Year MYGA | 1-Year CD |
|---|---|---|
| Typical rate (March 2026) | 4.75–5.25% | 4.50–5.00% |
| FDIC/NCUA insurance | No (state guaranty assoc.) | Yes (up to $250K) |
| Tax treatment | Tax-deferred until withdrawal | Taxable each year |
| Early withdrawal penalty | Surrender charge if applicable | Interest penalty |
| Minimum deposit | Typically $5,000–$10,000 | Often $500–$1,000 |
The tax deferral difference is significant but often overlooked. A 1-year CD pays you interest that you owe taxes on this year. A 1-year MYGA accumulates interest tax-deferred — you don’t owe taxes until you withdraw. If you’re in the 24% federal bracket, a 5.00% pre-tax MYGA return is worth more than a 5.00% CD return on an after-tax basis.
For a complete side-by-side, see our MYGA vs CD comparison.
Who Should Consider a 1-Year MYGA?
A 1-year MYGA makes the most sense if:
- You’re uncertain about your timeline: You have savings you want to earn a guaranteed return on, but you’re not sure if you’ll need the money in 2 years or 10. A 1-year term gives you a decision point with no penalty.
- You’re waiting on a better entry point: If you believe MYGA rates will rise further (following Treasury yields higher), a 1-year term lets you reinvest at higher rates when the term ends rather than locking in a 5-year rate now.
- You’re above the CD insurance limit: FDIC insurance covers $250,000 per depositor per bank. If you have more than that to park safely, a 1-year MYGA from an A-rated carrier — backed by your state’s guaranty association — diversifies your safety net.
- You’re in a high tax bracket: The tax-deferral benefit of a MYGA over a CD is more valuable if you’re in the 24%, 32%, or 35% bracket.
Who Should Stick With a CD Instead
A 1-year CD is the better choice if:
- You have less than $5,000–$10,000 to deposit (most MYGAs have higher minimums)
- FDIC insurance is a hard requirement for you — the guaranty association isn’t the same thing
- You need the interest income during the year (MYGAs typically defer all interest to the end or to withdrawal)
- You’re already in a low tax bracket where deferral provides minimal benefit
Understanding the Guaranty Association Safety Net
MYGA funds are not FDIC-insured, but they’re not unprotected. Every state has a life and health insurance guaranty association that steps in when an insurance carrier fails. Coverage limits vary by state but typically run $250,000 per annuitant per carrier. See our state guaranty association guide to find your state’s specific coverage limit.
For deposits above the guaranty limit, spreading across two highly-rated carriers from different parent companies is the standard approach. Carriers with A+ AM Best ratings — Allianz, Nationwide, North American — have the financial strength to make guaranty association protection a theoretical backstop rather than a practical concern.
How 1-Year MYGA Rates Are Set
Short-term MYGA rates track short-term Treasury yields more closely than longer-term products. In a normal yield curve environment, 1-year rates are lower than 5-year rates — you earn less for locking in shorter. In the current environment, the yield curve has been unusually flat, meaning 1-year rates are closer to 5-year rates than historical norms. This is unusual and worth taking advantage of if a 1-year term matches your needs.
See our annuity rate trends guide for context on where rates have been and what drives them.
What Happens When a 1-Year MYGA Matures?
At maturity, you typically have three options: withdraw your funds penalty-free, renew at the current rate being offered for another term, or transfer via a 1035 exchange to a different annuity. Most carriers send renewal rate offers 30–60 days before maturity. If the renewal rate is competitive, renewing is the lowest-friction option. If not, the free-look window at maturity gives you the chance to move without penalty. See our full MYGA guide for how renewals work.
Frequently Asked Questions
Are there 1-year fixed annuities available?
Yes — several carriers offer 1-year Multi-Year Guaranteed Annuities (MYGAs). These function like 1-year CDs but with tax deferral on the earnings. Not all carriers offer 1-year terms; the market is smaller than the 3–5 year MYGA market. Current 1-year MYGA rates from top-rated carriers are available in the table above.
What is the minimum deposit for a 1-year annuity?
Most carriers require a minimum of $5,000–$10,000 for a MYGA, including 1-year terms. A few carriers accept $2,500. This is higher than CD minimums at most banks, which is one reason 1-year MYGAs make most sense for savers with at least $10,000 to deploy.
Can I withdraw from a 1-year annuity early?
Some 1-year MYGAs have surrender charges that apply to early withdrawals during the term. Others have no surrender charge on 1-year products. Always confirm surrender terms before purchasing — see our surrender charges guide for how these work. Additionally, withdrawals before age 59½ are subject to a 10% IRS early withdrawal penalty on earnings.
Is a 1-year MYGA better than a savings account?
For money you can commit for 12 months, a 1-year MYGA currently outperforms the best high-yield savings accounts on both rate and tax treatment. The tradeoff is liquidity — a savings account lets you access funds any day; a MYGA ties up the money for the term. If you have a stable 12-month cash need, the MYGA is typically the better deal. If you need on-demand access, keep it in savings.