Building up a savings account can be one of the hardest things to do if you are living on limited means. This in turn can make some of your bigger goals seem far out of reach. That’s where an Individual Development Account (IDA) can help. Here are the basics to help you decide if an IDA could benefit you.
What is it?
An IDA is a special savings account for modest income earners in which contributions are matched dollar-for-dollar or more. IDAs are set up to help savers work toward a specific goal in a set amount of time
Will you qualify?
Individual IDA programs set their income, asset, credit and other qualifications based on state laws. Find a local program to determine your eligibility.
How do you find an IDA program near you?
The non-profit Corporation for Enterprise Development has a searchable directory of local IDA programs.
How much can you save?
Normally, IDA contributions can be made up to a total of $1,000 per year. Note that the $1,000 doesn’t include the matches that are made.
What can you use the money for?
Approved uses of IDAs include saving for a home purchase expenses, furthering of education, achieving professional certifications or starting or expanding a business.
If you have held off from saving because you felt your income was too low to set aside money, do yourself a favor and investigate if an IDA might work for you. Otherwise, you might be leaving free money on the table.
