How Debit Cards Enable the Poor to Save More

We study a natural experiment in which debit cards are rolled out to beneficiaries of a cash transfer program, who already received transfers directly deposited into a savings account. Using administrative account data and household surveys, we find that before receiving debit cards, few beneficiaries used the accounts to make more than one withdrawal per period, or to save. With cards, beneficiaries increase their number of withdrawals and check their balances frequently; the number of checks decreases over time as their reported trust in the bank and savings increase. Their overall savings rate increases by 3-4 percent of household income