Fixed-Term Annuities: Period-Certain Income and MYGAs Explained

The two contracts sold as fixed-term annuities, what they pay at today’s Treasury yields, how they compare with a CD or a Treasury note, and what protects them if the insurer fails.

A fixed-term annuity is one of two insurance contracts. A period-certain income annuity turns a lump sum into equal payments for a set number of years (5, 10, 20), whether or not you are alive to receive them. A multi-year guaranteed annuity (MYGA) is a deferred fixed annuity that credits a guaranteed rate for a set term, much like a certificate of deposit issued by an insurer (SEC Investor.gov). At the Treasury yields of November 3, 2026, a fairly priced 10-year period-certain annuity would pay about $1,058 a month per $100,000 (modelled, before insurer charges — not a quote).

Last updated 2026-11-04. Sources are linked next to each figure and listed at the end.

Two kinds of fixed-term annuity

Period-certain (fixed-period) income annuity. You pay a premium; the insurer pays a level amount every month for the chosen number of years and then stops. If you die during the term, the remaining payments go to your beneficiary. There is no bet on how long you live, so the payout is set by interest rates and the insurer’s costs alone.
Multi-year guaranteed annuity (MYGA). A deferred fixed annuity: the insurer guarantees a crediting rate for a fixed number of years. Interest compounds tax-deferred; at the end of the term you take the money, renew, convert it to income, or move it to another contract.

What a period-certain annuity pays (modelled)

Level monthly income from a $100,000 period-certain annuity, priced at the Treasury par yield of the same term on November 3, 2026 (Treasury), first payment one month after purchase, with no insurer charges. Monthly payment = premium × i ÷ (1 − (1 + i)⁻ⁿ), i = yield ÷ 12, n = months. Tax-free share = the exclusion ratio of a non-qualified contract, $100,000 ÷ total payments (Treas. Reg. §1.72-5(c)).
Term	Treasury yield used	Per month	Total paid	Tax-free share (non-qualified)
5 years	4.74% (5-year)	$1,875.23	$112,514	88.9%
10 years	4.95% (10-year)	$1,058.21	$126,985	78.7%
20 years	5.35% (20-year)	$679.44	$163,066	61.3%

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Model figures, not offers: a real contract’s rate is set by the insurer and includes its expenses and profit, so quotes are usually lower than a Treasury-rate model. Compare quotes for the same term and the same features.

Period certain vs life income. At 65, the same $100,000 buys a man about $761 a month for life on the same model (see annuity rates), against $679 a month for exactly 20 years. Life income keeps paying past 85 but stops at death; period-certain income stops at the end of the term but is never lost to an early death.

MYGA vs CD vs Treasury

The three ways to lock a rate for a term. Each rule is linked to its source.
	MYGA (fixed annuity)	Bank CD	Treasury note
Who guarantees it	The insurer; if it fails, the state life and health insurance guaranty association, in most states up to $250,000 in present value of annuity benefits (NOLHGA)	The FDIC, up to $250,000 per depositor, per insured bank, per ownership category (FDIC; 12 U.S.C. §1821)	The U.S. government
Tax on the interest	Deferred until withdrawn, then ordinary income (IRC §72(e))	Taxed every year as earned	Taxed every year federally; exempt from state and local income tax (31 U.S.C. §3124)
Getting out early	Surrender charge set in the contract, sometimes with a market value adjustment; many contracts allow a penalty-free withdrawal each year	Early withdrawal penalty set by the bank	Sell at the market price any business day (can be above or below what you paid)
Before age 59½	10% additional tax on the taxable part of a withdrawal (IRC §72(q))	No additional tax	No additional tax
At the end of the term	Take the money, renew, annuitize, or exchange tax-free into another annuity (IRC §1035)	Paid out or rolled into a new CD	Paid at face value
Limit on the amount	None set by the IRS (the insurer sets a maximum)	None (insurance limit above)	None for marketable Treasuries

The rate yardstick. On November 3, 2026 the Treasury paid 4.40% for 1 year, 4.74% for 5 years and 4.95% for 10 years (Treasury par yield curve). A MYGA paying no more than the Treasury of its term asks you to take on surrender charges and insurer risk for nothing extra; a higher rate is what those are worth to you. For scale: $100,000 compounding at the 4.74% 5-year yield grows to $126,056 in five years before tax.

Is a fixed annuity protected if the insurer fails?

Not by the FDIC. Each state has a life and health insurance guaranty association that continues covered benefits up to its limit. In most states the coverage level for a fixed annuity is $250,000 in present value of annuity benefits, and a larger contract is covered in part: a $300,000 contract would be covered at 83.3% ($250,000 ÷ $300,000) (NOLHGA). Limits differ by state, so check with your state’s association, and consider splitting large amounts between insurers.

Buying a fixed-term annuity: what to check

The surrender schedule for every year of the term, the penalty-free withdrawal amount, and whether a market value adjustment applies (Investor.gov).
Whether the rate is guaranteed for the whole term or only for the first year (a teaser rate).
What happens at the end of the term: how long the window is to withdraw or move the money before a new surrender period starts.
The insurer’s financial strength, and your state’s guaranty limit.
The free-look period to cancel after delivery, set by your state.
Where the money comes from. Bought inside an IRA, payments are fully taxable and count toward RMDs; bought with after-tax money, only the gain is taxable. See qualified vs non-qualified annuities.

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Common questions

What is a fixed-term annuity?

Either a period-certain income annuity, which pays a level amount for a set number of years, or a multi-year guaranteed annuity (MYGA), which credits a guaranteed interest rate for a set term before you withdraw or convert it.

Is a MYGA better than a CD?

Neither is better in general. A MYGA defers tax on its interest and often pays more, but carries surrender charges, a 10% additional tax on gains taken before 59½ (IRC §72(q)), and state guaranty coverage instead of FDIC insurance. A CD is FDIC-insured to $250,000 and taxed each year (FDIC).

What happens when a MYGA term ends?

You can usually withdraw the money, renew for a new term at the current rate, convert it to income, or move it to another annuity tax-free by a 1035 exchange (IRC §1035). Check the contract for how long that window lasts before it renews.

Can you lose money in a fixed annuity?

Not from market moves while you hold it to the end of the term. You can lose money by surrendering early (surrender charge, market value adjustment) or if the insurer fails and your contract exceeds your state guaranty association’s limit.

How much does a 10-year period-certain annuity pay per $100,000?

About $1,058 a month at the 4.95% 10-year Treasury yield of November 3, 2026 before insurer charges (Treasury); real quotes are usually lower.

Sources

Period-certain payments are the level-payment formula shown, at the Treasury par yield of the same term (research/data/treasury-par-yields-2026.json, copied from Treasury’s CSV on 2026-11-04); the life-annuity comparison is computed by frontend/js/calc/annuity-payout.js. QuantCalc names no insurer and sells no annuity. QuantCalc is calculation software, not tax, legal, insurance or investment advice.

Annuities explained → Qualified vs non-qualified annuity → Annuity rates → Annuity payout calculator → How long will my money last? →