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Frequently Asked Questions for the
Individual Development Account (IDA)

IDA stands for Individual Development Account. It is a special savings account for people with low income. Participants who save in an IDA will set a savings goal and reach it by saving money each month. The money saved will be matched with donations. This means that participants can receive another dollar for every dollar saved in an IDA. Once an individual’s savings goal is reached, an amount equal to one times the amount saved will be deposited into the savings account (for instance, if $1,000 is saved, another $1,000 will be added to the account. The total savings is $2,000). IDA savings and matched funds can only be used to purchase a house, pay for education or start a small business.

After signing up for an IDA program, each participant will complete online financial education classes before making their first deposit. The program sponsor handles all transactions to and from the IDA. IDA participants receive a report at least every quarter (3 months) telling them how much money (individual savings + match) is accumulating in their IDA. An IDA program can be as short as six months or as long as three years from beginning to end. IDA participants can withdraw money as soon as they have reached their savings goal, but they must first get approval from the IDA program sponsor.

Savings can be used for three things:

  1. Down payment on a house;
  2. Educational expenses (college, vocational, technical or career training school tuition, fees, books & supplies);
  3. Expenses related to starting your own business

You can take up to 3 years to reach your savings goal. This time can be reduced by larger savings deposits such as depositing all or part of your income tax refund, earnings from overtime, or other additional income from acceptable sources. Missing a monthly savings deposit without a worthy cause can cause the participant to be terminated from the IDA savings program.

  • Low Income: Participants must be either: 1) eligible for TANF or 2) have a household income that meets Federal poverty guidelines (guidelines are enclosed)
  • Net Worth: Participants must have less than $10,000 net worth at the end of December in the year prior to application (If you own a car, home and/or savings with a total value of $10,000 or more, you do not qualify for the IDA program)
  • Credit History: Debt from credit cards and loans makes it difficult to save. You might not qualify for an IDA if you have a lot of debt or poor credit. The program sponsor, Zion Hill CDC, (ZHCDC) may ask you to visit a credit-counseling center before starting the IDA program.

Participants’ savings will be held in a ZHCDC account. This is the only account participants can use. The IDA account will be separate from any existing accounts that the participant already has.

Participants must complete eleven online workshops on money and credit management before opening an IDA savings account. Participants will request a credit report and begin working to improve their credit score if needed. Participants will receive one-on-one assistance with college or vocational-technical school admissions, business start-up or buying a home depending on how the savings will be spent. Missing the workshops can prevent participants from participating in the IDA savings program.

All money deposited by participant will be returned to participant if the savings goal is not completed. Participants will lose any matched amounts applied to their account.

This is a question that you and the IDA Coordinator will be able to answer together. If you live in a low-income household and would like to own a home, further your education or start a small business, then opening an IDA could be the best way for you to reach your goal. But, if you are paying off a loan or have a lot of credit card debt, you may not be ready for an IDA. Each person and situation are different, so take time to ask questions and learn as much as you can about IDAs.

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