Demystifying stable value

Get a better understanding of stable value investments to see if they’re a good fit for your clients’ retirement plans.

Stable value is growing in popularity. 75% of defined contribution plans offer a stable value option.


Many advisors are considering including stable value in different investment structures.

Stable value basics

A stable value fund is a relatively low-risk investment option that focuses on providing:

  • Capital preservation
  • Liquidity
  • Reliable, positive returns
  • Stability and low volatility

Every stable value investment is backed by an investment contract issued by an insurance company or bank, which typically guarantees that participants receive at least the value of their principal, plus any accumulated interest.

Stable value funds may be ideal for participants who:

  • Seek current income with steady returns
  • Possess a shorter investment time frame
  • Want to diversify a high-risk, aggressive investment portfolio
  • Hope to avoid the relative unpredictability of the stock market or global economic conditions

Understanding stable value terms

The terminology associated with stable value investments can be nuanced and challenging for advisors, including those with decades of experience. Here are a few commonly used words defined:

  • Crediting rate: Often referred to as the effective annual yield, this is the interest rate applied to the book value of a stable value investment contract. It can be expressed either as a net or gross crediting rate, and can be fixed for the entire contract term or adjusted at defined points during the contract.
  • Interest rate floor: Also known as the guaranteed minimum interest rate (GMIR), this refers to the lowest rate participants will receive from their stable value accounts.
  • Portability: Most guaranteed insurance stable value accounts are fully portable, which means a new recordkeeper can continue to offer them as an investment option.

A sound, conservative investment option

With its built-in stability, yield and liquidity, a stable value investment can be ideal for any defined contribution retirement plan looking for a sound, conservative investment option.

Our white paper covers stable value basics, explains the growth of this option’s popularity, clarifies common terminology, compares stable value with money market funds, and discusses how you can achieve success in this marketplace. Download now .

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Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein.

The Lincoln Stable Value Account is a fixed annuity issued by The Lincoln National Life Insurance Company, Fort Wayne, IN. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. For contracts issued in New York, the Lincoln Stable Value Account is a fixed annuity issued by Lincoln Life & Annuity Company of New York, Syracuse, NY.

This material is provided by The Lincoln National Life Insurance Company, Fort Wayne, IN, and, in New York, Lincoln Life & Annuity Company of New York. Syracuse, NY, and their applicable affiliates (collectively referred to as Lincoln"). This material is intended for general use with the public. Lincoln does not provide investment advice, and this material is not intended to provide investment advice. Lincoln has financial interests that are served by the sale of Lincoln programs, products and services.