Prize Linked Savings
Our first Prize-Linked Savings Summit ("PLS: More than Fun & Games") was a great success. Professionals and academics from all sides of the spectrum came together to discuss groundbreaking issues in Prize-Linked Savings. Read more about the conference.
Prize Linked Savings is an innovative savings product that offers potential savers the chance to win a large prize based on the value of their savings deposits, linking the thrill of lottery or raffle play with a financial choice to save. These products are popular abroad, but until recently have not been tested adequately in the U.S. (See Prize Linked Savings shows promise in the U.S. below) D2D’s founder and Chairman, Peter Tufano has researched prized linked products internationally, complementing existing in-depth material. D2D is particularly interested in whether prize-linked savings products:
- will result in increased savings for lower income consumers
- will attract new consumers
- will attract new savers
Prize Linked Savings shows promise in the U.S.
D2D worked with Indiana
based Centra Credit Union to launch and study the first U.S. based prized-linked savings product beginning in late 2006. The Centra Super Savings Account offers holders a chance to win prizes each month, including laptop computers, mp3 players, gift cards, cash and more. Centra launched the project throughout its 22 branches on January 1, 2007, opened nearly 1,400 Super Savings Accounts and collected over a half million dollars in deposits in the first five months. For more information on the Centra project, see Consumer Demand for Prize Linked Savings.
Building on the success of the Centra experience, D2D began work in 2008 with the Michigan Credit Union League and the Filene Research Institute to launch a larger scale prize-linked savings promotion in the state of Michigan. With funding support from the Center for Financial Services Innovation, D2D was able to partner with the League and Filene to launch an eight-credit union savings promotion raffle in 2009. The product, “Save to Win®,” was a 12-month Share-Certificate that allowed for unlimited deposits throughout the year. For every $25 deposited, a saver received a chance to win monthly cash prizes or the end of the year $100,000 grand prize. At the end of the 2009 pilot year, over 11,000 savers had saved over $8.6 million. After the great success of the pilot year, the Michigan Credit Union League to
ok over the operations and as of 2010, has over 40 credit unions offering the Save to Win product. For more information on the pilot year, see the 2009 Save to Win Final Report below. For information on the Michigan credit unions offering the product, visit www.savetowin.org and read about our takeaway LEARNINGS.
D2D is currently analyzing data from the 2010 year and the 2011 year. The final report for 2010, complete with analysis of account holder activity and insights on new innovations in the product, will be available late summer 2011. A snapshot showing the continued growth by comparing Save to Win as of December 31, 2009 to December 31, 2010 is below:
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Additionally, D2D has been surveying current Save to Win account holders to learn more about who is in the account and taking advantage of this unique savings product. A preliminary Snapshot of savers from 2009, 2010, and 2011 who are currently saving in 2011 suggests the profile below:_0.png)
State Legislatures Show Signs of Change and Success for Prize Linked Savings
In addition to states where laws already allow for savings promotion raffles, states throughout the country are interested in amending their laws to allow for prize-linked savings products by passing explicit savings promotion raffle bills. Read more about these groundbreaking changes here.
Save to Win
Consumer Demand for Prize-Linked Savings: A Preliminary Analysis
Prize-Based Savings: Product Innovation to Make Saving Fun
Peter Tufano: Saving whilst Gambling: An Empirical Analysis of U.K. Premium Bonds
Save to Win Final Report