Children's Savings Account - A Review of Research on the Investment in the Future of Illinois' Children and Families

Jan 19, 2009
  • Description

Children's savings accounts are innovative financial products opened at birth that support children and families in savings for their child's future goals of education, job training, homeownership or entrepreneurship. The creation of the Children's Savings Account Task Force gives Illinois a unique opportunity to increase the savings, assets, and financial skills of its residents -- boosting the longterm financial stability of the state. Within the context of shrinking savings rates and rising debt, Illinois Public Act 950358 mandates that the Task Force develop an innovative plan to encourage savings, asset attainment, and financial literacy. Fulfillment of these goals will lessen the current trend toward debt accumulation and support positive savings behaviors for future generations of Illinois residents. This paper lays out important research, laws, and best practices relevant to the design and development of a children's savings account plan in Illinois. It also provides questions for the Task Force to discuss in developing important components of a children's savings account program for Illinois. These issues and the respective questions include: financial education, including the unbanked, overcoming participation barriers, economic mobility, aspirational impacts, initial deposits and matched savings, and existing products.