Individual Development Accounts

Individual Development Accounts (IDAs) are matched savings for particular purposes. IDAs enable low-wealth families to save and enter the financial mainstream.

IDAs also provide low-income families with an opportunity to build assets and reach life goals.

Like 401(k)s, where an employer matches an employee’s savings, IDAs encourage savings by offering a match on deposits (often 1:1 or 2:1). These savings can be used to buy a home, pay for post-secondary education, or start a small business. Financial education is usually required for IDA account holders, including education on specific asset purchases such as home ownership.

Over 500 IDA initiatives exist in communities across the United States. Some form of IDA legislation has been passed in 35 states, Washington, D.C., and Puerto Rico. In addition, 30 states have included IDAs in their state Temporary Assistance for Needy Families (TANF) plans. Legislation supporting IDA programs nationwide has also been passed at the federal level in the Assets for Independence Act (AFIA) of 1998.

Beginning in 1997, CSD has conducted extensive research on the first nationwide demonstration of IDAs, the American Dream Demonstration (ADD).