Individual Development Accounts

These special savings accounts can provide a great way to finance a business venture or pay for education and training expenses. If you meet income and net worth guidelines, you can use an Individual Development Account to quadruple your savings through donated matching funds. Read on for more information and contact staff to see if you qualify, 541-426-3598 or 800-645-9454.

What is an IDA?
An Individual Development Account, or IDA, is a special savings account designed to help those of modest finances save money. If you save in an IDA, your money will be matched with donations. Our business and education IDA program is a 3:1 matched savings program, which means if you save $1.00, the program will match it with $3.00. The savings and match can be used to start or expand a business, pay for post secondary education and training, or pay for adaptive equipment or training needed for you to be competetive in obtaining or maintaining a job or business.

In addition to earning match dollars, IDA participants learn about budgeting, saving, banking and more. People who open business IDAs are required to attend business planning classes, attend peer consulting classes and complete financial literacy training. People who open education IDAs are required to complete financial literacy training and develop an education plan. For adaptive equipment and training IDAs, you will need to complete financial literacy training and prepare a personal development plan. Staff from the Northeast Oregon Economic Development District (NEOEDD) will help IDA participants meet these requirements by providing training and one-on-one consultation.

There are limits on the amount you can save. For low income households, up to $3,000 of savings will be matched with $9,000 of donations. For very low income households, the maximum savings increases to $3,667 with match of $11,000 in donations. If you save $3,000, you will be able to invest $12,000 in a business asset or college education when you graduate from the program. For a business or adaptive equipment and training IDA you must reach your total savings goal before accessing the IDA funds. For an education IDA, you can draw funds every 12 months to pay for tuition and other eligible expenses. NEOEDD staff will help you figure out a savings plan that will work for you.

Why is my money matched?
Your money is matched to encourage and help you save enough to pay for eligible expenses that are necessary to start or expand a business or to invest in your future wage earning potential through obtaining education and training.

The funds from an IDA can be used for the following items or qualified expenses:
Business - rent, equipment, working capital, inventory expenses

Education - tuition, fees, books and equipment required by the educational institution

Adaptive Equipment & Training - equipment/technology, specialized training (including GED, job coaching, language classes,etc.)

Money cannot be used to:
Pay yourself - Funds are paid directly to vendors who sell you the items or training
Pay past debt – Funds cannot pay for purchases made with your credit card or other loan products
Pay for trips or home improvements

Criteria you will need to meet to qualify for an IDA:
Must be 12 or older
Must be able to open a savings account
Household net worth must be equal to or less than $20,000 – staff will help figure this out
Must have income
Proof that Income is at or less than 80% of median state income, or 200% of the Federal Poverty Level or qualify for Earned Income Credit or have a household member who qualifies for TANF
If starting a business IDA, have a concept for a business

Explanation of household net worth requirement:
Your household includes everyone that you live with, regardless of whether or not they are related to you.
Net worth is determined by subtracting the total of all of the household debts from total market value of the household assets (savings, retirement, property, etc.), excluding the value of your first car and your primary house. NEOEDD staff can help you figure out your net worth.

Examples of income:
Taxable wages, salaries, and tips
Net earnings from self-employment
Gross Income received as statutory employee
Social Security and Social Security Disability Income

Temporary Aid to Needy Families

Proof of income eligibility:
Refer to the tables below for income and eligibility guidelines. The most common proof of income is your federal tax return. If your situation has changed since you did your taxes, you will need to show proof of current income. This can be your unemployment statement and/or current pay check stubs.

Examples:

To qualify as Low Income, a household of 2 adults and 2 children (household of 4) would need to have income at or below $47,100 adjusted gross annually.

To qualify as Very Low Income, a household of 2 adults and 2 children (household of 4) would need to have income at or below $42,400 adjusted gross annually.

The steps to open an IDA account:
Meet with NEOEDD staff

Complete 3 months pre-savings
IDA Application, proof of income and $50 fee
Business concept review by NEOEDD, if saving for a business IDA

Currently there is a waiting list for IDA accounts, new applications are being accepted, but will be put on the waiting list until further notice

3 months pre-savings:
Can be any savings or checking account
Minimum of $25 a month increase in account balance for three consecutive months
Acceptable proof of the pre-savings must show the date, amount of each deposit, and beginning and ending months - Bank Statements, Deposit slips, etc.

The steps to access your Business IDA savings:
20 hours business classes with NEOEDD
A written business plan with a 12 month projected cash flow statement
6-36 months of savings in approved IDA account
Financial Literacy class (passing financial literacy test)
Reach your savings goal

Identify and receive approval to withdraw funds for qualifying expenses

The steps to access your Education IDA savings:
6-36 months of savings in approved IDA account
Financial Literacy class (passing financial literacy test)

A w ritten education plan
Funds disbursed to educational institution

The steps to access your Adaptive Equipment/Training IDA savings:
6-36 months of savings in approved IDA account
Financial Literacy class (passing financial literacy test)
A written personal development plan

Reach your savings goal

Identify and receive approval to withdraw funds for qualifying expenses

More Info? Contact NEOEDD at 541-426-3598, 800-645-9454 or email saramiller@neoedd.org or pfrolander@neoedd.org