In a first-of-its-kind effort to get college students saving and investing early, the University of Kentucky is offering to seed brokerage accounts for all its 31,500 students.
It’s free money, ostensibly, but the program, called UK Invests, requires that students accomplish certain tasks before the school deposits any money in their accounts.
Many colleges have investment clubs, and some universities offer classes on personal finance. What sets UK Invests apart is that it is university-wide, and cash-strapped students don’t have to scrape together a penny of their own money. The school is offering to contribute up to $250 a semester into each student’s account, depending on which tasks they complete.
Some payouts are tied to learning about money. For example, attend a talk on the magic of compounding and other investing topics, and Kentucky will deposit $30 in your account. And students can earn money in other ways: by attending a workshop on coping better with stress ($10) or by uploading their résumé to the career center ($25).
By offering incentives for tasks that can improve students’ health, academic performance, and employability, the university is hoping to “hardwire habits that will lead to a lifetime of meaning and purpose,” says Kirsten Turner, Kentucky’s vice president for student success.
Fidelity, the brokerage firm connected with UK Invests, is adding incentives as well. Once a student has a balance of at least $50, Fidelity throws in $100. And it is matching 10 percent of the first $300 deposited. In all, Kentucky Wildcats who signed up last fall can get up to $630 this academic year.
To get started, students must sign up for the Fidelity Bloom for UK Invests app. Students also must fund their accounts—with their own money, the school’s contributions or both. Once that’s done, the Fidelity Bloom app suggests three basic low-cost mutual fund options, depending on the student’s tolerance for risk.
Although only a few mutual funds are available to trade in the Fidelity Bloom app, UK students can invest in other mutual funds, exchange-traded funds and stocks or bonds by logging into their Bloom account through the firm’s primary website to execute a trade. Money that’s not invested will earn interest in a Fidelity money market fund.
Of course, students can withdraw cash at any time, but the university hopes they stay invested. Time is their biggest advantage, says Eric Monday, the university’s executive vice president for finance and administration.
Some students have gotten the message. Sophomore Elizabeth King has received more than $200 since she opened her account in the fall of 2023, in part by attending career fairs. She invested in a low-cost S&P 500 index fund and plans to hold it for the long haul. “I’m choosing to put it aside and use the power of compounding,” she says, a concept she learned at an investing presentation. She’s also looking forward to market dips.
