Individual Development Account - Usage Data

Usage Data

Data from AFI, ORR and the American Dream Demonstration demonstrate the following results since 1999:

• More than 1,100 sites have provided IDAs to more than 83,000 savers;
• 43% (35,500) accountholders have made an asset purchase;
• 26% (9,400) of asset purchases were for homes;
• 20% (7,200) of asset purchases were for education;
• 18% (6,400) of asset purchases were for small business capitalization; and
• 33% (11,900) of asset purchases were made by accountholders who participate in programs that allow IDA savings for other purchases, including cars, home repair, computers or transferring an IDA to a spouse or dependent.

Research on the impact of IDA programs has revealed:

• IDA savers are 35% more likely to own a home, nearly twice as likely to attend college, and 84% more likely to own a business;
• More than half of program graduates who previously received public assistance no longer receive assistance after completing the program;
• Prior to enrollment, 90% of IDA savers did not use direct deposit and more than half did not have a savings account; and
• Children of parents in IDA programs also developed and maintained savings patterns.

While key findings show that IDAs do lead the poor to save or acquire assets, not all indicate that IDAs necessarily increase net worth (assets minus debt). While costs are declining, IDAs can be expensive to administer and run the risk of being used by the poor as a checking and savings account in addition to a means of accumulating wealth, reflecting in part the dearth of savings products aimed at the poor.