Savings Plans
Savings Plans: There are some programs available to help you save money for post-secondary training or college, for starting a business or for buying a car. These include college savings plan and establishing an Individual Development Account.
P.O. Box 607
Richmond, VA 23218
Toll Free 1-888-567-0540
Internal Revenue Tax Code Section 529 provides tax-free earnings on money you save for your child's education. A 529 plan is a state-operated investment plan that gives families a federal tax-free way to save money for college. You can deduct up to $2,000 per year per account from your Virginia taxable income. There are three Section 529 options in Virginia.
The Virginia Prepaid Education Program (VPEP) locks in future college costs for today's students in the tenth grade or younger. VPEP covers full tuition and mandatory fees at Virginia public colleges. Your VPEP investment comes with a guaranteed rate of return for other types of colleges nationwide.
The Virginia Education Savings Trust (VEST) offers a selection of 11 investment funds. Students of all ages can participate wherever they live. You can use VEST to pay for all major college expenses. These include tuition, fees, room and board, textbooks and required supplies and equipment.
CollegeAmerica is Virginia's partnership with the American Funds. With CollegeAmerica, you can save for all major college expenses.
Virginia Individual Development Account
The Virginia Individual Development Accounts (VIDA) Program is a special savings program that helps eligible individuals gain financial literacy skills and build assets. For every dollar the participant saves in a designated account, VIDA will match it with two dollars. The combined savings can be used to:
- Purchase a home
- Start a business
- Go to school (postsecondary education)
In addition to the 2:1 savings match, participants also receive financial literacy and other training and support. The Department of Housing and Community Development partners with intermediary organizations, which are typically nonprofit or governmental agencies located throughout the state, to provide these services. Individuals interested in participating work with a local intermediary to complete an application.
For individuals accepted into the program, DHCD will open and monitor a custodial account on their behalf. DHCD also holds the match funds in escrow on behalf of the saver. Matching funds are limited to $4,000 per participating household. VIDA accounts are available on a first come, first served basis for all eligible, Virginia residents. In order to be eligible, individuals must:
- be a U.S. citizen or legal alien residing within Virginia
- have a dependent child under the age of 18 living in the household
- meet income requirements
- be accepted into the program
You can download a brochure on HOW TO BECOME A VIDA SAVER (pdf file) or visit the Department of Housing and Community Development web site or call DHCD at (804) 371-7030.
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