NEW YORK (1/17/14)--Save to Win, the prize-linked savings program for credit unions, garnered more national attention with articles in CNN Money and The New York Times this week.
In the past two months, NPR, ABC News and PBS have featured the program, which encourages saving by giving entries for prize drawings for each deposit. All money that goes into the account, including interest, belongs to the account holders.
On Tuesday, CNN Money detailed the benefits for members and for credit unions in "Savings account lotteries: Win up to $25,000."
In Michigan, where the program started with the Michigan Credit Union League (MCUL), Filene Research Institute and the Doorway to Dreams Fund, the average savings balance of a participant has grown to $2,873 from $734.
"These accounts are not geared toward people with lots of money," MCUL President/CEO Dave Adams told CNN Money. "They're geared toward people who aren't regular savers."
CNN Money also had a slideshow of winners from Besser CU, Alpena, Mich.; Community Alliance CU, Dearborn, Mich.; KEE FCU, Kearney, Neb.; U.P. Catholic CU, Marquette, Mich.; and Mountain CU, Waynesville, N.C.
The common themes were disbelief and a desire to share the good fortune. "If you draw our name again next year, just pretend you didn't see it and draw again. It's somebody else's turn," KEE FCU winner LaVerne Bricker told CNN Money.
In Wednesday's The New York Times, "Playing the Odds on Saving" cites the crisis in Americans' savings habits--more than a quarter have saved less than $1,000 for retirement, according to the Employee Benefit Research Institute--and how lottery-style programs can boost participation.
Henry Hubbard, CEO of $32 million-asset Communicating Arts CU in Detroit, told how Save to Win gained attention immediately from members--about 800 members signed up. "It's not the silver bullet, but it's making a difference," Hubbard told the paper. "It's the best thing we've been able to find to encourage people of modest means to put a little bit aside."
Credit unions gain deposits and increase loyalty among members, Adams said. "Credit unions see the merits for this type of program," he told the Times. "It is part of their social mission to help people of modest means achieve their financial objectives."
Prize-linked savings accounts are allowed by state law in Connecticut, Maine, Maryland, Michigan, Nebraska, New York, North Carolina, Rhode Island and Washington, according to Doorways to Dreams.
In October, both the U.S. Senate and House of Representatives introduced legislation that would allow credit unions and other financial institutions to offer prize-linked savings accounts.