Capital Preservation Option
Do you value safety over risk?
The FDIC-insured Capital Preservation Option1 has an interest rate that changes periodically and seeks income consistent with the preservation of principal. The current APY rate of this portfolio can be found on the Price and Performance Page, located here.
Note: The Guaranteed Option2 was closed to new contributions after February 22, 2019.
1The Capital Preservation Option invests all of its assets in the NexBank High-Yield Savings Account, (“HYSA”). The HYSA is held in an omnibus savings account insured by the Federal Deposit Insurance Corporation (“FDIC”), which is held in trust by the Kentucky Higher Education Assistance Authority at NexBank. Contributions to and earnings on the investments in the Capital Preservation Option are insured by the FDIC on a pass-through basis to each account owner up to $250,000, the maximum amount set by federal law. The amount of FDIC insurance provided to an account owner is based on the total of (a) the value of an account owner’s investment in the Capital Preservation Option; and (b) the value of all other accounts held by the account owner at NexBank, as determined by NexBank and FDIC regulations. Except for the Capital Preservation Option, investments in KY Saves 529 are not insured by the FDIC.
2Any contributions to the Guaranteed Option received after conversion were redirected to the Capital Preservation Option. TIAA-CREF Life Insurance Company may, in the future, change the rate of return of the Guaranteed Option. The Guaranteed Option was closed to new contributions at conversion on February 22, 2019.
In February 2023, or earlier depending on certain conditions, any remaining assets in the Guaranteed Option will automatically move to the Capital Preservation Option or a similar investment available at that time. You may also exchange or withdraw money from the Guaranteed Option at any time. Remember, under federal law, you’re allowed to make two exchanges per calendar year.
The current effective annual interest rate for the Guaranteed Option credited to KY Saves 529 through June 30, 2021, is 1.45%, subject to the claims paying ability of TIAA-CREF Life Insurance Company.
TIAA-CREF Life Insurance Company will continue to serve as the Guaranteed Option investment manager after the conversion for funds deposited before February 22, 2019.