How do Prosperity Savings Accounts Work?
Prosperity Account Timeline
Prosperity Accounts (also known as Individual Development Accounts – IDAs) are an innovative financial product and economic development tool used by community organizations throughout the United States to stimulate participants' savings rates, build their assets, and connect these individuals to the economic mainstream. Private foundations and the public sector fund most of the programs. The following four-step process documents how a saver moves through the Prosperity Account program.
STEP 1 – Pre-qualification and Application
All Prosperity Account savers must pre-qualify for the program. A Pre-qualification survey can be taken here.
STEP 2 - Opening an IDA Account
All savers meet with a United Way administrator to review application, current household budget, discuss asset goals, review policies and procedures and complete savings plan agreement. Approved applicants will be referred to a designated financial institution for account opening.
STEP 3 - Financial Eduation Training
Asset-specific training is required prior to the purchase of their savings goal. Community partners provide valuable information to help increase the likelihood of successful asset purchase and retention. There is also one hour of free financial education training required for every month the saver is enrolled in the program.
STEP 4 - Withdrawal, Asset Purchasing, and Beyond
In Step 4, savers, with staff assistance, are ready to make bank withdrawals from their Prosperity Account. Participants can use funds to purchase a home, pursue their education, start a small business or purchase a vehicle.
For a detailed breakdown of how the Prosperity Account program works, please refer to United Way Prosperity Account Policies and Procedures Manual