What are individual development accounts (IDA)?
Individual
development accounts (IDAs) are special savings accounts for
lower income people eligible for financial aid. The IDA's will
help families save money for qualified purchases that will
help them become financially self-sufficient. Your IDA account
may only be used for the following qualified purchase: Acquisition
cost for a first home, post secondary education expenses,
or business expenses for self-employed people.
You may only deposit
income that you have earned through work into an IDA, the
state matches those funds, helping you reach your goal more
quickly. The Individual Development Account (IDA) is a matched
savings account that helps people of modest means obtain productive
assets that can generate long-term benefits—such as
purchasing a new home, opening a small business, or furthering
an education. The theory is that with a combination of economic
incentives and education, more and more families will save
for long-term goals.
New IDA-account web-page featuring how to get an IDA Program Loan coming soon!
Please visit IDA again!
Who helps you set up an IDA Account?
The state office of trade and economic development (OTED)
administers the IDA program. OTED contracts with local nonprofit
agencies to enroll participants in the IDA account program,
monitor account activity and provide training and other support
services while you are enrolled.
Who can enroll in the IDA savings account program?
To enroll in the IDA account program, you must receive (or be eligible
to receive) TANF or SFA assistance, or post TANF families with
income below one hundred seventy-five percent of the federal
poverty level. You may remain enrolled in the IDA accounts program for three
years from the date of opening your IDA account.
What happens once you enroll in the
IDA program?
Once you've enrolled, your IDA accounts contractor will help you develop
an individual savings plan that identifies the steps you must
take to earn the match. To earn the match you must:
- Attend financial skills classes to learn how to manage
your personal finances.
- Open your savings account at a financial institution that
is participating in the IDA program through an agreement with
the "IDA account" contractor.
- Deposit savings from earned income into your ida-account on
at least a quarterly basis.
How are your IDA matching funds handled?
Your matching funds are held in a separate account until
you are ready to make a qualified purchase. The IDA contractor
provides you with monthly statements showing the amount of
matching funds you have earned.
How much money can you save with an
IDA?
The state will give you up to two dollars for every dollar
you save, up to a maximum match of four thousand dollars.
So, if you save two thousand dollars (the maximum amount allowed),
you could earn four thousand dollars in match, for a total
of six thousand dollars.
When can you withdraw money from your
account?
When you have an IDA, you really have two types of accounts:
your own savings account and a trust account holding your
match funds.
- You can withdraw your own savings at any time - it's
your money; but you will forfeit any matching deposits earned
on those funds and could jeopardize your ability to stay
in the ida program. You also need to report any withdrawals
to your DSHS case manager if you are receiving any type
of public assistance benefits.
- You cannot withdraw your match until you are ready to
purchase your asset and have met all of the requirements
in your individual savings plan. At that time, the IDA contractor
will withdraw the matching funds and pay them directly to
the person or organization that you are purchasing your
asset from (such as the mortgage company, college, or bank).
Will having an IDA affect your eligibility
for other public assistance programs?
The funds held in your IDA cannot be taken into consideration
when determining if you qualify for TANF, Social Security,
Food Stamps, or Medicaid. However, if you withdraw savings
from your IDA account other than to purchase your asset, or
if you leave the IDA account program early, your IDA eligibility
will likley be effected. See WAC 388-470-0045 for more details about
how IDAs affect your eligibility for other types of public
assistance benefits.
