Individual Development Accounts (IDAs) are one of the most promising tools available to help low-income American families save, build assets and enter the financial mainstream. By rewarding the monthly saving efforts of working-class families, IDAs can open doors to home ownership, additional education, business opportunities and larger retirement finances.

An IDA works as a matched savings account, so for every dollar you place in an IDA, a sponsor matches the deposit with a preset amount. Some IDAs match you dollar for dollar. Others will match $2 or $3 for every $1 you save. The amount of the match depends on the program, but you can see how any match helps the money add up quickly.

IDAs are typically managed by community organizations, and accounts are held at local financial institutions, such as banks and credit unions. All participants receive classes on saving and budgeting as well as on topics such as cleaning up one's credit. The length of the program and the type of training provided can vary.

When it’s time to put the funds to use, the IDA administrator writes a check to the third-party recipient, whether it’s a title company, college, or business equipment vendor and you’re on your way.

Individual Development Accounts: What Is an IDA?

Back to Individual Development Accounts Home Page