Prize-Linked Savings: Creating Financial Confidence and Opportunity

Categories: GamificationNon-financial FactorsPrize-Linked Savings

Prize-linked savings (PLS) products are improving financial confidence and self-efficacy. Previous D2D research has provided evidence on the impact of prized-linked solutions on helping financially vulnerable consumers try savings products and build reserves. New research shows that consumers are building financial confidence and improving their financial decision-making across products and improving their overall financial health. Users of PLS products attribute this change to their access and continued use of their prize-linked savings accounts.

“The majority of Save to Win members report being financially vulnerable (they may be asset poor, low- or moderate-income, or non-savers). In 2013, this ranged from 62% (Nebraska) to 81% (Washington).”

“Accountholders describe Save to Win as having a ‘psychological part of it that helps you manage your finances and build more savings, in addition to the savings in the account. It really serves a much larger purpose.’”

“While opening an account is a crucial first step, the importance of continuing to deposit and build financial reserves cannot be understated. Creating a habit of depositing savings is incredibly important to developing financial confidence.”

  • Suggesting an exact amount to save with a reason for doing so, rather than just suggesting that people save in general, may provide a better framework for behavior change.
  • By penalizing withdrawals, account holders are more likely to leave the money alone and allow it to grow over time.
  • While lack of money to save is one barrier, a lack of knowledge about savings products and how to save is another that requires consideration.
  • Most Save to Win account holders regularly deposit $25, the amount needed to gain an entry in the prize drawing.
  • Some account holders had never had a Certificate of Deposit, or even knew what they were, and many found it to be a perfect savings vehicle due to penalizing withdrawals.