Individual Development Accounts

If you save money in an Individual Development Account (IDA), the IDA program’s sponsor or financial institution will match the money you save. The match may be anywhere from one to four times the amount you deposit. For example, if your IDA program has a 2:1 match and you deposit $50 into your account, the program will add an additional $100 towards your savings goal, so that your total savings for that month will be $150!

Note: There aren't as many IDA programs as there used to be. Some are still active, but it can take a bit of effort to find one that is accepting applications.

To open an IDA:

• Your annual income must be 200% of the Federal Poverty Guidelines or less ($30,120 per year for individuals)
• You must have earned income from a job or your own business
• You have to take financial literacy classes about things like money, debt reduction, developing a savings plan, credit, and investing; and
• Depending on the program, you may also need to be a U.S. citizen or permanent resident.

You also have to use the IDA to save money towards meeting an approved goal. IDA programs usually allow the following goals:

• Buying a first home
• Paying for education or training costs, or
• Funding a small business.

Most IDA programs only let you save a limited amount of money in your account, usually $4,000 to $6,000. This includes the money you deposit plus the matching funds. Once you reach the limit, you won’t be allowed to deposit any more money into the account. IDA programs also limit how long you can save (usually three years).

Finding and Applying for an IDA

Once you’ve decided to do an IDA, you must take several steps to enroll in an IDA program:

1. Decide how much money you plan to save and what you are going to do with it. You could use the money for something that will help you with your education, with your small business, or with buying a home.
2. Locate an IDA program in your area. There are good IDA program directories at the Ohio CDC Association, Prosperity Now, and the Assets for Independence Resource Center (AFI).

   • Note: There aren't as many IDA programs as there used to be. Some are still active, but it can take a bit of effort to find one that is accepting applications.

3. Find out as much as you can about the IDA program you are considering.
   • What is the source of the program’s funding? Is it federally funded?
     • If the IDA program is federally funded, money deposited and matched in that account will not be counted by SSI or Medicaid. That means it will not impact your benefits.
     • If you enroll in an IDA that is not funded by the federal government (for example, an IDA funded by a nonprofit or private company), money deposited and matched in your IDA may jeopardize your SSI and Medicaid benefits.
   • Does the program fund the goal you decided upon?
     • Federally funded programs only allow you to save for small business developments, higher education expenses, and the purchase of a first home.
     • Some privately funded IDAs may allow you to save for other goals, like buying a new computer or car.
4. Once you have found an IDA program that is suitable for you, attend an orientation meeting to learn more about it.
5. If you decide to enroll, give the required personal and financial information to verify you qualify for the program.

Once you have been accepted into the IDA program, you will be given an IDA caseworker who will help you with your account. You’ll open a savings account with a bank or credit union that is tied to your IDA program. Depending on the program, you may need to deposit a certain amount of money into your account each month.

IDAs and Benefits Programs

Supplemental Security Income (SSI)

Because SSI has income limits and resource limits, working and saving money in an IDA could risk your eligibility. Generally, IDA programs that are federally funded will not impact your benefits. Talk to a benefits planner about this before doing an IDA program.

Plans to Achieve Self-Support (PASS)

PASS is an SSI program that lets you set aside money for a specified work goal, such as starting a new career or going back to school. The money you set aside in a PASS does not count against SSI's income and resource limits. Learn more about Plans to Achieve Self-Support.

An IDA can be a part of your PASS, as long as your goal for the IDA and PASS is the same. If the money you save in your IDA is part of a PASS, it will not be counted by SSI and won’t jeopardize those benefits.

The Earned Income Tax Credit (EITC)

The EITC is a federal tax program that lowers income taxes for low- to moderate-income workers and families. Money you get from an EITC can be put into an IDA and matched, helping you to reach your savings goal faster. Learn more about the Earned Income Tax Credit.