What is True Blended Yield™?
True Blended Yield™ is Annuity.com's standardized rate measure for multi-year guaranteed annuities (MYGAs). It takes every rate segment a product actually pays across its full surrender period, compounds the segments together, and annualizes the result into a single yield. Simple-interest products are converted to their compound-equivalent, so every product can be compared on the same honest basis.
Every rate on our MYGA rate comparison is shown as its True Blended Yield™.
The formula
Each segment of a product's rate schedule becomes a growth factor: (1 + rate)^years for compound segments, or 1 + rate × years for simple-interest segments. Multiply the factors across the entire surrender period, then annualize:
True Blended Yield™ = (product of all segment growth factors)^(1 ÷ total years) − 1
The segments must cover the entire surrender period — including any trailing years that pay only a contractual minimum. Measuring only the guaranteed window of a product whose surrender schedule runs longer produces exactly the inflated number this measure exists to correct.
Three worked examples
Simple interest dressed as compound. A “6.30%” simple-interest rate over 5 years grows one dollar to $1.315. Annualized with compounding, that is (1.315)^(1/5) − 1 ≈ 5.63% — meaningfully lower than the advertised 6.30%.
A first-year bonus. 9% in year one, then 5.5% for years two through five, blends to (1.09 × 1.055⁴)^(1/5) − 1 ≈ 6.19% — not the 9% headline, and less than a naive average suggests.
A short guarantee inside a longer surrender period. 6% guaranteed for 3 years inside a 5-year surrender schedule, with a 1% contractual minimum after, blends to roughly 3.98% — the headline 6% describes just three of the five years your money is committed.
Why we built it
Advertised MYGA rates are not computed on a common basis: some are simple interest, some are first-year bonuses, and some guarantee less time than they lock up. True Blended Yield™ normalizes all of them so a teaser and a steady rate can be compared on equal footing. Rates are pulled daily from Cannex, the industry-standard annuity rate data provider, and independently converted by Annuity.com — see the patterns it corrects in why headline rates can be misleading.