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Under the Portfolio Method, a deposit received by the company in any year of the contract earns the same interest as deposits made in prior or later years. Under the New Money Method, deposits made in a given period receive the new money interest rate. Deposits made in prior or later periods receive the then-current new money rate. Some companies maintain the new money interest indefinitely, while other companies roll the interest into a Portfolio Method rate after some period of time.

investment year method (IYM)
An accounting method in which an insurer keeps records of the interest rates it earns annually on funds assigned each year to accounts within the general account. Also called the new money method. Compare to the portfolio method.