Children's Savings Accounts (CSAs) are long-term savings or investment accounts that provide incentives to help children (from birth to 18 years old) — especially low-income children – build dedicated savings for postsecondary education. As of December 2016, more than 313,000 children in 31 states and the District of Columbia have CSAs.
CSA programs differ, but they all have three defining features:
- Incentive structures to grow savings, such as initial seed deposits or savings matches
- Savings designated for postsecondary education or for purchasing another type of asset (e.g. a house or a small business)
- Incentive funds that are restricted to paying for postsecondary education or another allowable asset
How CSA Programs Work
Benefits of CSAs
CSAs also have other positive effects, including improving children’s socio-emotional development, increasing parents’ expectations for their children’s educational attainment and reducing symptoms of maternal depression.
CSA Program Examples
College Kids (St. Louis, MO)
Started in 2015 by the St. Louis Treasurer, the College Kids program encourages children to think about college from a young age. The program automatically opens CSAs at a local credit union for every kindergartener in St. Louis public and charter schools and seeds the accounts with $50. College Kids provides other incentives to grow savings, including matching parents’ savings and an extra deposit for good school attendance. College Kids also connects participants’ parents with financial capability services that help them become more financially secure.
College Kick Start (Nevada)
The Nevada State Treasurer launched a CSA initiative in 2013 for incoming kindergarteners in 13 of Nevada’s rural counties. This initiative expanded to the entire state the following year. Each child receives an automatic $50 deposit into a 529 college savings account. The goals of the program are to create a college-bound culture in Nevada and to increase the number of families actively saving for future college expenses.