Lessons from SEED

As mentioned earlier, this morning we held an event releasing a new report, “Lessons from SEED” which examined the learnings from the nation’s largest, longest running demonstration of the potential of children’s savings accounts.

Video of the event, featuring Michael Sherraden, Jose Cisneros, Ray Boshara, Bob Friedman and Lisa Mensah will be available in the near future on the event page.

However, the burning question, what are the lessons of SEED? I recommend reading the whole report, but there are some significant highlights:

• Participating families, most of whom were low-income and many of whom lived below the poverty line, managed to save.
• Despite high levels of poverty and limited financial knowledge, 57 percent of SEED participants in community programs made deposits to their accounts.
• CDAs have the potential to generate positive aspirational effects for participants and their parents beyond the economic benefits provided by the savings account — including improved self-esteem, greater hope for the future and fiscal prudence.
• Outreach and enrollment in CDA programs proceed much more smoothly when opening an account is automatic.
• Account features that made it easy to add funds, such as direct deposit, and made savings less immediately accessible, such as withdrawal restrictions, facilitated savings.
• Getting full participation in financial education programs is challenging, and providing such education at school is the most promising way to increase participation.

Those findings are very encouraging and they hint at why we believe so strongly in the ASPIRE Act. Low-income families can and will save if the right vehicle and opportunity exists. Children in families with assets fare better than children in families without assets, and a large-scale,  inclusive structure makes it easier to reach families, change children’s lives and reap the benefits of this kind of investment in children.

The Child Savings Account Coalition (www.childsavingscoalition.org) is a group of organizations working for progressive, universal savings accounts for every child at birth with the goal of alleviating poverty, promoting sound financial awareness and social behavior and inspiring a sense of hope and opportunity for every child. You can learn more and join by following the link above.