CD interest to MYGA

[pletal]

I'm thinking about pulling my CD interest at a credit union (penalty free) and putting it into a MYGA at 4.3% for 6 years.


Cd's averaging 3.2% and coming due between 2-4 years from this month.


This is just the interest, principle will keep drawing interest till due time. Amount is under state insurance for annuity. Tax will be deferred till maturity and am hoping to live in a state income tax free state by that time.



Any red flags I may be missing? Thanks

 

[jazz4cash]

I’ve pulled interest off of a CD to buy another CD with a higher rate and later maturity. It worked out well but I had the complication of transferring IRA funds.

MYGAs generally have very user-friendly terms for rate lock at application and time to fund the account. I think the MYGA rate you are looking at expires June 1st. Maybe rates are higher by then but I doubt it.

Edit: Already answered

I would check the early withdrawal penalty and use the EWP calculator at depositaccounts.com to see if its worth dipping into the principal as well