Child Development Accounts (CDAs) are long-term investment accounts opened when children are young, ideally at birth. Starting CDAs early in a child’s life maximizes the opportunity for savings growth. It also allows children and parents to reap benefits that go beyond simply having money in an account.
CDAs have proven to be effective in positively changing families’ finances, but the benefits of CDAs do not stop there. Research shows that CDAs also have positive impacts on families’ beliefs and behaviors. They empower families to save for the future. They help children and families gain the confidence and motivation to achieve more. They offer hope and direction for a brighter future – for individuals and families, for businesses and organizations, and for Missouri.
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Better Emotional Health in Mothers
After surveying more than 2,700 mothers over time, researchers found that mothers of children with CDAs reported improved emotional health and reduced symptoms of depression when compared to mothers whose children did not have CDAs.
Improved Outcomes for Children
Studies show that CDAs positively impact children’s social and emotional growth. Parents with more hope about their children’s future interact with children in a more positive way, contributing to healthier child development.
Stronger Family Finances
Families of children with CDAs are 15x more likely to open their own state-sponsored 529 savings plan and save more money in 529 accounts. The average amount of individual 529 savings contributions is over four times greater for children with CDAs.
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More than Money
Child Development Accounts are not designed to fund post-secondary education on their own. However, research shows that, with just a small amount of money set aside for the future, aspirations and behavior in parents and children shift—for the better.
A Plan for the Future
Times are changing. Today, in an atmosphere of ongoing competition, a skilled workforce is necessary to keep up with the demands of the national and global economy. Studies using 2017 American Community Survey data show that Missourians with post-secondary education earn 67% more than their counterparts without.
Backed by Research
After more than 20 years in testing and development, CDAs have been implemented and studied extensively. The research agrees: With just a small investment, CDAs bring big returns.