Individual Development Accounts
An IDA is a matched savings account that enables individuals to save and build assets more quickly than they can on their own. These programs assist participants by encouraging savings, investment and asset accumulation. Typical IDA programs reward monthly savings of highly motivated individuals who are trying to buy their first home, pay for post-secondary education or start a small business. A participant’s savings are eligible for a match, usually one to five times that of the individual’s personal savings. For instance, a Homeownership IDA has a 2:1 match. If an enrollee was to save $1,000 over a period of time, the program would match the account with $2,000, giving the the participant $3,000 to use as a downpayment for a home.
RDI currently has the following IDA opportunities:
Montana Small Business IDA Program
This IDA program allows participants wanting to start a new business or those with an existing business to increase their ability to access credit and to gain a business asset or equity for a business loan. Eligible participants are encouraged to save for one year; their savings are eligible for a 1:2 match (up to $2,000) toward their small business needs. For instance, a client who saves $1,000 over a year would be matched with $2,000 giving the enrollee $3,000 to purchase supplies, pay rent, insurance or even use the money as business capital.
Montana is the number one state in the nation for microenterprise ownership, such as snow removal and/or lawn maintenance services, jewelry design, entrepreneurs in cosmetology, and Made in Montana artisans. Montana also has some of the lowest wages in the nation and many families rely on microenterprise to make ends meet.
Funded by Assets for Independence (AFI) and other community partners, this Small Business IDA serves urban, rural and Native American communities across the State of Montana. RDI is currently working with partners to raise the match money necessary to secure the AFI funding. Once secured, the IDA program will assist up to 125 current or potential small business owners in achieving their goal of financial security. In addition to matched savings, the program will also provide all participants the opportunity to attend an Entrepreneurship Certificate Training Course which will cover marketing and advertising, legal issues concerning businesses, record keeping and financial management and small business resources.
FESP – Personal Asset Matched Savings Program
Eligible participants are encouraged to save for six consecutive months; their savings are eligible for a 1:3 match (up to $900) toward a personal asset. For instance, a client may save $300 over 6 months or more and will be matched $900. They now have $1,200 to purchase an asset like a new computer or a washer and dryer.
For more information about RDI’s IDA programs, enrollment qualifications and requirements call Karen Vanni at 406-454-5710 today!