Savings and Financial Electronic Transaction (SAFE-T) Accounts

Over the past two decades, policymakers, academics, and others have pursued an array of policies and strategies to help lower and middle income households build savings and assets and access reasonably-priced financial products. While progress has been made, there have been few advances to delivering a high-value, affordable financial product at scale.

Over the last five years, however, technological developments, new entrants into the financial services market, and new insights into consumer demand, particularly the financial behavior of lower income consumers, have boosted the creation of innovative financial products. Prepaid debit accounts are one such innovation. These products can meet many of the transaction functions that checking and savings accounts offer, but without the limitations of credit checks and ChexSystems because the accounts are literally pre-funded. 

The Asset Building Program at the New America Foundation has developed a plan to bring prepaid debit accounts to all families who want them--by delivering them at tax time!  This plan, for Savings and Financial Electronic Transaction (SAFE-T) Accounts can deliver these accounts at scale--helping families avoid high-cost financial services, keep more of their money and begin to save.  In addition, this plan will save the federal government money!

We've released an updated version of the SAFE-T Accounts policy paper to reflect new developments (and the updated title, SAFE-T Accounts were once called Assets and Transaction Accounts (ATAs)) to learn more about this innovative policy, please visit the following resources:

• The Savings and Financial Electronic Transaction (SAFE-T) Account: A Proposal to Deliver a Low Cost, High Value Transaction and Savings Account at Tax Time, April 2009 by Melissa Koide--a full, 20 page discussion of the history, need for, and mechanics of SAFE-T Accounts
• The Assets and Transaction Account: A Proposal for a Low Cost, High Value Transaction and Savings Account, November 16, 2007 by Melissa Koide--the original policy proposal and discussion paper
• The Assets and Transaction Account: A Federal Policy Proposal, October 2, 2007 by Melissa Koide--a PowerPoint Presentation on SAFE-T Accounts
• The SAFE-T Account One-Page Summary, October 2008

In addition to these resources, several opinion pieces have been published to date which discuss SAFE-T Accounts:  

• Technology is Helping Firms Reach Unbanked, November 16, 2007 by Melissa Koide and Rourke O'Brien
• A Convergence of Opportunities: Delivering Prepaid Accounts at Tax Time, February 21, 2008 by Melissa Koide
• Making a Transaction and Savings Account a Certainty, Just Like Taxes, May 2008 by Alejandra Lopez-Fernandini
• Tax Refunds Deposited onto Prepaid Cards Could Provide Financial Access to Unbanked, September 23, 2008 by Melissa Koide