Hello, YieldAlley readers! In this issue:

⚡️ The power play behind Hyperion, Mark Zuckerberg’s colossal data center being built in rural Louisiana (Sherwood)

📋 Your Annual Personal Finance Checklist (Wired)

🏦 Why There Is a Lot Less Junk In the High-Yield Bond Market (Morningstar)

🤑 Newly Single, She Wants to Be Financially Secure—and Splurge a Bit. Can She Afford It? (WSJ)

🏈 Prediction markets soar ahead of 2026 Super Bowl (CBS)

With the Fed having cut rates through 2025, you'd expect MYGA rates to have fallen off a cliff. They haven't. Current top rates from highly-rated carriers are still running 5.5-6.3% for five-year terms, and if you're willing to go longer or accept slightly lower insurer ratings, you can push north of 6.5%.

A MYGA is essentially the annuity world's answer to a CD. You hand over a lump sum to an insurance company, they guarantee you a fixed rate for a set term (typically 3-10 years), and your money grows tax-deferred until you pull it out. At maturity, you can take the cash, renew, or do a tax-free 1035 exchange into an income annuity if you're looking to create a paycheck.

As of early February 2026, here's what the MYGA landscape looks like across major terms:

The highest rates come from newer or smaller insurers with lower ratings (think B++ to A-), while established names with A+ ratings from AM Best — the primary rating agency that evaluates insurance company financial strength — (Guardian, Mass Mutual, Northwestern Mutual) are offering rates with four handles. The tradeoff is straightforward: higher rate, incrementally higher insurer risk.

Two Flavors: Compound vs. Simple Interest

Most MYGAs use compound interest, where your interest earns interest. But there's a subset that uses simple interest, and the difference matters if you plan to withdraw annually. Simple interest MYGAs typically advertise higher headline rates to compensate for the lack of compounding. If you're taking interest-only withdrawals each year, simple interest often delivers more total income over the term. If you're letting it grow untouched, compound wins. A 6.3% simple interest MYGA and a 5.7% compound interest MYGA can end up at the same place after five years if you're not touching the money, but the simple version pays more if you're pulling interest annually.

Who This Works For

Conservative investors with 3-10 year horizons who don't need immediate access to funds. Pre-retirees planning to convert the lump sum into lifetime income at maturity via a 1035 exchange. Those in high tax brackets now who expect to be in lower brackets when they withdraw. Investors looking to diversify beyond bonds and CDs in their fixed income sleeve. Most MYGAs allow 10% penalty-free withdrawals annually after year one, which provides some flexibility without killing the rate.

Who Should Pass

Anyone needing liquidity before maturity beyond that 10% annual allowance. Early withdrawals trigger surrender charges that decline over the term but can be steep in years 1-3. People under 50 who might need funds before 59½ (you'll eat a 10% IRS penalty plus ordinary income tax on gains). Those uncomfortable with insurer credit risk or state guarantee association limits (typically $250,000-$500,000 depending on your state). Investors seeking inflation protection or high growth — MYGAs don't adjust for inflation and won't keep pace with equities over long periods.

What to Watch

Insurer ratings matter more for MYGAs than almost any other product. You're relying on their claims-paying ability, not FDIC insurance. Stick with A- or better from AM Best unless you have a specific reason to go lower. Check for market value adjustments (MVAs) in the contract—they can reduce your payout if you bail early and rates have risen since purchase. Understand whether your MYGA compounds or pays simple interest, and make sure it aligns with whether you plan to withdraw annually. If you're holding a MYGA in an IRA, you're doubling up on tax deferral, which may not make sense unless you have a specific strategy around RMDs or Roth conversions.

Current rates are still above the 10-year and 20-year historical averages for comparable maturities. If you've got money earmarked for the 3-7 year window and don't want market exposure, MYGAs are worth comparing against intermediate bond funds and CD ladders. Just make sure you're comfortable locking in for the full term and that you're clear on what happens if the insurer has trouble down the road.

Government Money Market Funds (7-Day Yields)

Brokered CD Rates (6-Month Rate)

ETFs (30-Day Yields)

Link to SameDay.Costco.com

This is essentially a 28.6% discount on a $35 order, making it worthwhile for small-to-medium grocery runs or filling specific gaps in your pantry. Since orders are fulfilled through Instacart, you can pay with Instacart gift cards (potentially purchased at a discount elsewhere for additional stacking). The one-use-per-membership limit means this is a one-time benefit, so consider timing it for when you actually need delivery convenience rather than forcing a purchase just to use the code. If you routinely shop Costco but don't want to make a warehouse trip, this effectively covers your delivery fee plus gives you extra savings. Just be mindful that same-day prices may carry a markup compared to in-warehouse pricing.