Individual Development Accounts (IDAs)
IDAs allow participants an opportunity to acquire a lasting asset after saving for an extended period of time. The three eligible assets are college tuition, a first home, or small business capitalization. These special matched savings accounts are designed to help families and individuals of modest means establish a pattern of regular savings, and ultimately, purchase a lasting asset of value that is likely to return substantial long-term benefits to its owner. Such benefits include security, stability, and opportunities for increased income.
How does it work?
Participants are required to save for at least six months, although most save money over the course of two years. At the end of the program, every dollar deposited into the IDA by the participant is matched by a combination of federal and non-federal funds at a rate of 2:1.
In North Dakota, participants are able to save up to $2,000 for a match of $4,000. This means that if the maximum amount is saved, the participant earns $6,000 to use for the purchase of a first home, college tuition, or small business capitalization.
Throughout the savings period, participants are required to make monthly deposits into their IDA from earned income meaning that the participant is employed. Participants are also required to complete financial literacy training, which is a critical component as it teaches skills such as: creating and following a budget, owning and managing a bank account or credit card, credit counseling and credit repair, and guidance on refundable tax credits such as the Earned Income Tax Credit. Additionally, participants are required to attend asset-specific training. This training is focused on the participant’s asset that they intend to purchase upon the completion of their IDA savings.
For more information or to find out if you are eligible, click here.
To download and fill out an application for the IDA program, click here.
To apply for the IDA program, you must make an appointment and submit the completed application, along with the following documents: your credit report, a copy of your North Dakota state-issued ID card (e.g. driver’s license), and income verification (pay stubs, W2s, etc.).