Every rate on this page is an annual yield — the true compounded return you would earn
by holding the product to the end of its guarantee period. Quoting every product this way is what lets you
compare any two lines in the table directly, even when the carriers credit interest in completely different ways.
Some carriers advertise a nominal rate instead. It is a larger number, and it is not wrong —
but it is not what you actually end up with.
The two ways interest gets credited
Compound interest. Each year’s interest is added to your balance, and the following year’s
interest is calculated on that larger total. Your interest earns interest. Most MYGAs work this way.
Simple interest. Each year’s interest is calculated on your original deposit only. You receive
the identical dollar amount every year, and it never grows.
What that looks like on $100,000
Take a five-year product advertised at 6.45% simple interest:
| Year | Interest credited | Balance |
|---|
| 1 | $6,450 | $106,450 |
| 2 | $6,450 | $112,900 |
| 3 | $6,450 | $119,350 |
| 4 | $6,450 | $125,800 |
| 5 | $6,450 | $132,250 |
| Total | $32,250 | $132,250 |
Turning $100,000 into $132,250 over five years is the same result as earning
5.75% per year, compounded. So 5.75% is the figure this page shows — it is what the
product is genuinely worth, even though the brochure says 6.45%.
Why we do it this way
A 5.75% compounding product and a 6.45% simple-interest product leave you with exactly the same money.
Displayed at their advertised rates, the second one looks clearly better. Displayed as annual yield, they are a tie —
which is the truth. This is the same reason banks are required to advertise APY on savings accounts
and CDs rather than the headline rate: so that shoppers can compare products that compound differently.
The short version: if a brochure shows a higher number than this page does, the brochure is
quoting the nominal rate and this page is quoting the yield. Neither is inaccurate — they answer different
questions. Ask your agent to confirm which figure you are looking at before comparing two products.
