Because each IDA program is different, each will have different requirements. However, most IDAs follow some similar steps.
- You'll attend an IDA orientation session, where you'll learn about the importance of asset building, how IDAs work and the importance of continued savings throughout your lifetime.
- After the orientation, you'll fill out an application to indicate your interest in becoming an IDA account holder. The form will ask about your debts, income, family members, education and so on. Unfortunately, there are usually lots of deserving people like you who want an IDA and only a certain number of accounts available. So, you might not be accepted into the program on your first try.
- If you're accepted into the program, you'll open an IDA savings account with the programs financial partner, which is usually a bank or credit union, and sign a commitment to save a certain amount of money. As long as youre in the program, you'll receive a periodic statement that contains your current level of savings, the value of the matching contributions and the interest your IDA account has earned.
- Shortly after you enroll in the IDA program, you'll meet with IDA staff members to develop a savings plan. In addition, the staff will help you establish or clean up your credit, discuss income and spending patterns and work with you to develop a saving schedule based on how much you and your family can afford to save each month. You'll also be asked to attend financial education sessions where you'll learn vital concepts such as banking, investing and money-management skills.
- Once you've accumulated adequate funds in your account, you can arrange for a withdrawal. The withdrawal forms require a purpose for the funds, such as a tuition payment, and the program administrator reviews the request to ensure that it's legitimate. Once the withdrawal request is approved, the IDA administrator writes a check to the appropriate organization, such as a college, to accompany the check you write from your portion of the account.
The Prospective Account Holder Questionnaire asks some questions to consider before applying for an IDA account. The Sample IDA Application shows what sort of information you'll need when you apply for an IDA.
Individual Development Accounts: How Does the IDA Program Work?