Online IDA: Recordkeeping Technology for Individual Development Accounts (IDAs)

Individual Development Accounts (IDAs) – matched savings accounts earmarked for the purchase of a significant asset, such as a home – were one of the first asset building tools proposed for lower-income families. Since the first IDA programs appeared at community organizations in the mid-1990s, the field has grown through pilot and demonstration programs to serve tens of thousands of account holders nationwide. IDA proponents have advocated for large-scale federal funding of IDAs since the early 2000s.
Scale Challenges
While public funding is critical for continued growth in the number of IDAs, D2D and others believe that funding alone will not build a thriving IDA market for low-income families. Other challenges include the historically high cost to deliver IDAs, the need to coordinate multiple stakeholders (customers, financial service firms, funders and program sponsors), and the sheer size of the potential market (estimated at over 40 million households). Great strides are needed in terms of efficiency, reach and public funding for IDAs to reach scale.
A Solution: Online IDA
To address challenges of efficiency and reach, D2D partnered in 2000 with financial services processing giant SunGard Data Systems and jointly developed Online IDA, a web-based IDA recordkeeping and financial transaction system. Working with community partners and nearly 100 IDA participants, D2D beta tested Online IDA between 2003 and 2006. The tests established Online IDAs functionality and capability, and demonstrated that a diverse segment of IDA holders were comfortable managing their accounts online.
Online IDA Today
Online IDA was designed to support a user base of tens of thousands of account holders, and it becomes efficient only at these large volumes. After successful beta tests, D2D suspended further development of the product pending passage of federal legislation (such as the Savings for Working Families Act, or the Aspire Act) or a similar development likely to support a substantially larger market for individual matched savings accounts.