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N.Y. Times blog notes CUs prize-linked savings efforts
NEW YORK (11/19/10)--Credit unions’ efforts to promote personal savings and to reach the underserved were noted in a Thursday New York Times blog. The blog discusses the concept of prize-linked savings (PLS): “PLS is a kind of savings account that pools some of the interest from all depositors and pays out a big lottery prize every month or so. It combines the thrill of the lottery with the safety of a savings account. It’s sometimes called a ‘no-lose lottery,’ since a depositor is automatically entered into the lottery but can’t lose the original money she deposits.” The blog mentioned Michigan’s “Save to Win” program--the creation of Harvard professor Peter Tufano, which has been offered among several credit unions in the state. The program, by attaching a lottery prize to deposits, encourages people who would not normally be inclined to do so, to deposit money into a credit union and keep it there. For every $25 that goes into a certificate of deposit, a credit union member gets one chance at winning a weekly lottery and one entry for an annual grand prize of $100,000. The program recently paid out its first $100,000 prize to an 86-year-old woman who had deposited $75 in her account at Nu Union CU, Lansing, Mich. (News Now Feb. 5). To read the blog, use the link.
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