Program overview
Matched savings incentive program to build savings: SaveUSA is an asset-building intervention that targets tax filers with low-income backgrounds. When preparing their tax return at a Volunteer Income Tax Assistance (VITA) site, tax filers are offered the opportunity to open a SaveUSA savings account with a local financial institution and pledge to save between $200 and $1,000 of their tax refund. Individuals who leave their pledged savings in the account throughout a year receive a 50 percent match on that amount. The program’s goal is to encourage participants to increase unrestricted savings to meet financial emergencies to improve their overall financial well-being.
Implemented in partnership with financial institutions and nonprofit agencies: SaveUSA is administered by a nonprofit organization that offers free tax preparation services in partnership with local financial institutions.
Centered around tax filing: Since tax refunds are typically among the largest one-time payments that households with low-income backgrounds receive, SaveUSA encourages tax filers to open a SaveUSA savings account and pledge to save at the moment when they learn the size of their tax refund.
Savings incentive: If SaveUSA filers maintained their deposit in the SaveUSA savings account for one year, they received a 50 percent match, up to $500. Participants are allowed to withdraw money from their savings account at any time without any penalties and fees, but withdrawal precludes them from receiving the 50 percent match. Participants are eligible to receive the savings match incentive for three years.
- Strategies
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Wealth building
One study with a rigorous design provides some evidence for SaveUSA as a strategy to increase savings among low- and moderate-income individuals.
- A 2015 randomized controlled trial found that SaveUSA increased the percentage of individuals with any non-retirement savings by 8 percentage points and increased the average total amount of savings held by $522 (30 percentage points) when compared with members of a control group, who were not offered a savings match.
Establish strong partnerships: VITA sites and financial institutions play a crucial role in the delivery of SaveUSA. VITA program operators are responsible for promoting uptake among potential participants, and as such, lead organizations should ensure VITA operators fully understand the program details and are thoroughly trained on how to best pitch it to potential participants. Financial institutions may not interact directly with participants, but they must be willing and able to provide savings accounts with the specific requirements included in the SaveUSA program design: no ATM cards, no minimum deposit requirements, no fees for fund withdrawals, and no dormant account fees.
Identify reliable funding sources: In order to implement SaveUSA, lead organizations will need to identify and solidify funding to cover the cost of the savings account match. For example, previous implementations have secured funding from foundations (e.g., Annie E. Casey Foundation), federally available funds (e.g., Corporation for National and Community Service), and nonprofit organizations (e.g., United Way).
Include a financial counseling component for participants: The SaveUSA matched savings incentive may be coupled with an informational campaign to encourage positive savings habits among program participants. VITA program operators should share materials and guidance on the different types of savings accounts, the role of interest, and the importance of having savings, and should offer tips and planning tools to help participants work towards increasing their savings year-round.
Monitor progress and collect feedback: SaveUSA participants have the option to withdraw funds from their savings account at any point during the year period, thus removing themselves from eligibility for the 50 percent savings match. Consequently, lead organizations should establish processes to receive automatic updates for any deposits or withdrawals in order to monitor how many participants are on track to receive their savings match. This information can help inform budgeting and enrollment decisions and help organizations target specific participants for interviews or feedback surveys.