Maybe you’ve been saving for a while and your account has been steadily growing - but the college years are just around the corner. You’re happy with what you’ve got and you don’t want any surprises. It’s no longer about getting big returns, it’s about preserving your funds until your student is ready for the next step in their education. Perhaps you just want a stable rate of return as you prepare for the eventual costs of higher education.
Changing Your Investments
Once you invest in a particular investment portfolio, you can transfer contributions and any earnings to another investment portfolio up to twice per calendar year or upon a transfer of funds to a Minnesota College Savings Plan account for a different beneficiary.
Periodically Review Your Investments
It’s a good idea to periodically re-evaluate your investment strategy as your goals, investment horizon, and personal situation change — for example, annually at tax time, on a yearly basis if your income changes, or upon the birth of another child.
How the Principal Plus Interest Investment Option Works
This investment option seeks to preserve capital and provide a stable return. You may want to consider it if you have a short investment horizon and are looking for a conservative investment with a low level of risk.
Principal Plus Interest Option
|INVESTMENT OPTION NAME||ALLOCATION||INVESTMENT OPTION OBJECTIVE|
Investment Objective. This Investment Option seeks to preserve capital and provide a stable return.
Investment Strategy. The assets in this Investment Option are allocated to a funding agreement issued by TIAA-CREF Life, which is an affiliate of TFI, to the Board as the policyholder on behalf of the Plan. The funding agreement provides a minimum guaranteed rate of return on the amounts allocated to it by the Investment Option. The minimum effective annual interest rate will be neither less than 1% nor greater than 3% at any time. The guarantee is made by the insurance company to the policyholder, not to Account Owners. In addition to the guaranteed rate of interest to the policyholder, the funding agreement allows for the possibility that additional interest may be credited as declared periodically by TIAA-CREF Life. The rate of any additional interest is declared in advance for a period of up to 12 months and is not guaranteed for any future periods. The funding agreement in which this Investment Option is invested is: TIAA-CREF Life Funding Agreement.
Transfers from the Principal Plus Interest Option to the Money Market Option are not permitted. If this restriction changes, you will be notified prior to the effective date of any such change.
Accumulations (including contributions and earnings) under the Funding Agreement for the Principal Plus Interest Investment Portfolio will be credited to the Minnesota Board of Investment (on behalf of the Minnesota Office of Higher Education) with an effective annual interest rate of 1.70% and are guaranteed to earn this rate through August 31, 2023, subject to the claims-paying ability of TIAA-CREF Life.
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