Individual Development Accounts (IDAs) are restricted savings accounts for individuals of limited financial means and for specific restricted purposes such as continuing education, purchasing a home, buying a vehicle if needed for employment, deposit on a rental apartment, or starting a business. IDA programs give participants formal and informal opportunities to learn how to manage and budget money, improve their earning capability, and invest in themselves and their communities. IDA programs are managed by community organizations and accounts are held at local financial institutions. Private and public funds are used to match the contributions of low-income people as an incentive to participate. Savings are matched 2 to 1.
In Connecticut, the State Department of Labor (DOL), with federal funding and private contributions, awards grants to community organizations for the purpose of implementing Individual Development Accounts for lower income individuals and families. There are also private and/or government partnerships, apart from the DOL funded programs, that administer IDA programs in Connecticut.
The eligibility criteria differ with each program, but there is usually an income eligibility limit as well as an asset limit for entrance into the program. Other requirements may include employment or residency in a given town or county.
How IDAs Work
Participants are usually asked to:
• Make regular savings deposits (amount are determined on an individual basis)
• Attend financial education courses
• Participate in monthly Asset Specific Savings Club
• Work with a Case Manager on an ongoing basis
Matched funds will be made available to participants when they are ready to purchase an asset. At that time a check will be issued directly to the company, institution or individual furnishing all or a part of a participant’s asset goal (a mortgage company, home inspector, wholesale supplier, or community college, for example).
To Find Providers in Connecticut’s Community Resources Database
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Individual Development Accounts
SOURCE: Connecticut Department of Labor
PREPARED BY: 211/kq
CONTENT LAST REVIEWED: January2019