This article is part of Virginia529’s “Three Things to Know” Investment Portfolio series, highlighting the more than 20 portfolio choices available to Invest529 customers. The information presented is an overview of the plan’s investment options and should not be considered advice. Before selecting a portfolio consider factors such as the age of your child and your tolerance for risk. Past performance is no guarantee of future results. 

Principal Protected Portfolios are generally a more stable investment option, designed to protect against losses to the original amount you’ve invested.

What is the goal of a Stable Value Portfolio?

Stable value portfolios are an investment option for individuals looking to keep risks low. Investments grow slowly and steadily over time without losing value.

Stable value investments are typically conservative, focusing on a high-quality, diversified fixed-income portfolio. These portfolios consist of bonds backed by contracts from banks and insurance companies, offering protection to investors from the ups and downs of interest rates. Related: Invest529’s Stable Value Portfolio

What is an FDIC-Insured Portfolio?

An FDIC-insured portfolio is a low-risk way to save while earning interest daily and protecting against loss. Deposits into the omnibus accounts are insured by the Federal Deposit Insurance Corporation (FDIC) on a ‘pass-through’ basis to each account owner up to $250,000.

Invest529’s FDIC-Insured Portfolio invests 100% of its assets in interest-bearing omnibus deposit accounts at Atlantic Union Bank. The interest rate is 5.20% as of July 2023 (or about 5.42% annually). Related: Invest529’s FDIC-Insured Portfolio

How does a Tuition Track Portfolio work?

Exclusively designed for Virginia residents, the Tuition Track Portfolio mirrors the average growth in tuition across public colleges and universities in the state. Acting as a defined benefit portfolio, it's like locking in the cost of college at today's rates.

Each year, the Average Tuition at Virginia's public colleges and universities is calculated and split into 100 units for the unit price. You can buy units at any time and in any amount. When it's time to use them, for every 100 units purchased, a student will receive one year of the current Average Tuition, regardless of how much tuition rates have increased. Although it's based on Virginia public colleges and universities in-state tuition, the portfolio is versatile and can be used at any eligible educational institution in the country. Related: Meet Invest529’s Tuition Track Portfolio; Tuition Track Portfolio Performance

Key Takeaways:

• Stable value funds may be a strong option for conservative investors, those having relatively short time horizons, or those who want their account value to grow with low risk.
• An FDIC-insured portfolio is a low-risk way to save while earning interest on the investment. As of July 2023, the interest rate on the portfolio was 5.20%.
• Tuition Track Portfolio, exclusively for Virginia529 residents, keeps pace with Average Tuition growth across Virginia’s colleges and universities but can be used at any eligible educational institution in the country.

Low fees, tax advantages and diverse investment options are reasons Invest529 is consistently ranked among the top 529 plans by independent sources.

The examples above are provided for illustrative purposes only and are not intended to reflect or predict the actual performance of any specific investment. Virginia529 cannot and will not provide legal, financial, or tax advice, and nothing herein or in any other written materials shall be construed as such.

For more information on Virginia529’s college savings options, visit Virginia529.com or call 1-888-567-0540 to obtain program materials. These include information on Virginia529 programs, investment objectives, risks, charges, expenses and other important information; read and consider them carefully before investing. Virginia529 encourages prospective participants to seek the advice of a professional concerning any financial, tax or legal implications related to opening an account. For residents of states other than Virginia: before investing, you should consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protections from creditors that are only available for investments in that state’s qualified tuition program. ©2024 Virginia College Savings Plan. All Rights Reserved.