A Smart Match: How SaveUSA Encourages and Increases Savings

SaveUSA is a tax-time savings program that offers eligible individuals a 50 percent match if they deposit a portion of their tax refund into a savings account and maintain the initial deposit for approximately one year. SaveUSA combines the unique opportunity presented by the tax refund moment with a valuable incentive, precipitating short-term savings and moving individuals on a pathway to longer-term savings and greater financial stability.  SaveUSA was designed to build a body of evidence for a broader policy goal:  integrating a tax time savings incentive into the federal tax code. SaveUSA has inspired replication in Houston, TX and additional interest across the country.

The Program Model
SaveUSA is currently being operated by organizations in New York City, San Antonio, and Tulsa at select Volunteer Income Tax Assistance (VITA) sites, which offer free tax preparation to low-income filers. To participate in the program, eligible tax filers open a specially designated SaveUSA account and deposit, at the point of tax preparation, a minimum of $200 in the account.  If they leave this initial deposit untouched for approximately one year, they receive a 50 percent match (up to $500).  There are no restrictions on how participants may use funds from their account, and savers are encouraged to roll over funds and save again. During the 2011 and 2012 tax seasons, over 3,300 individuals opened accounts and pledged to save an average of about $550 each. Approximately 70% of individuals fulfilled their commitment each year, saving nearly $2.5 million total.

The Evidence
SaveUSA builds upon a successful three-year demonstration, $aveNYC, that was piloted by the New York City Department of Consumer Affairs Office of Financial Empowerment (OFE). $aveNYC demonstrated that very low-income individuals previously disconnected from the mainstream financial system can and will commit to saving if presented with the opportunity, as 80 percent of participants maintained the savings for a year and earned the match funds. This pilot program saw more than 2,000 people with an average income of $17,147 open an account. Over one-third of participants were previously unbanked.  People who received the match are typically using the money to pay household expenses, debt, or to cover emergencies.

The Evaluation
MDRC is evaluating the impact of SaveUSA on savings in households with low incomes, and whether the effects of such savings improve financial stability.  In two of the cities, NYC and Tulsa, MDRC is conducting a Randomized Control Trial (RCT) that will compare outcomes for people who receive the matched account with an otherwise comparable group that does not receive it. This RCT is coupled with monitoring and evaluation of program performance in all cities. Impact findings are expected in early 2014.

  • Food Bank for New York City (New York City, NY)
  • Community Action Project of Tulsa (Tulsa, OK)
  • United Way of San Antonio & Bexar County (San Antonio, TX)

SIF SaveUSA Evaluation Reports:

SIF SaveUSA Background Research: