North Dakota Individual Development Accounts

Individual Development Accounts (IDAs) are unique matched savings accounts offered by different entities, including non-profit organizations, across the United States. North Dakota Community Action Partnership (NDCAP), an entity that encompasses all seven Community Action Agencies in North Dakota, currently offers the IDA program statewide to adult participants who are at or below 200% of the Federal Poverty Guidelines. Qualified participants are able to save up to $2,000 in their IDA which is matched at a rate of 2:1 allowing them to earn an additional $4,000 at the end of the savings period. Participants are required to complete financial literacy and asset specific trainings. One of three assets can be purchased with the IDA: a first home, post-secondary education, or small business capitalization. All assets must be purchased in North Dakota and all deposits into the IDA must come from earned income meaning that the participant is employed.

The IDA program is dedicated to teaching participants how to save and invest rather than borrow and spend. Throughout the program, participants learn to develop savings habits and meet financial goals. Not only is financial knowledge greatly increased through financial literacy training, but the new knowledge and skills are immediately utilized through development and maintenance of a monthly budget. Participants learn about the asset purchase process and are able to gain skills necessary for long-term goal planning. All participants learn the importance of saving for lasting assets. Those who never thought it would be possible are inclined to save for a better future and they feel a greater degree of social connectedness. Combining these aspects allows participants to reach individualized investment goals and gain a stake in their community. Since the program's inception in 2002, the seven Community Action Agencies have had a total of 62 graduates: 18 who purchased their first homes, 35 who utilized the IDA for education, and nine participants capitalizing their small businesses. In addition, 62 more participants are currently saving in an IDA and will be purchasing their asset over the next few years.

Category:

Nonprofits & Activism

Tags:

• North Dakota
• poverty
• IDA
• IDAs
• Idas
• matched savings account
• college tuition
• first home
• home purchase
• buying home
• small business