Save to Win

by Manshu on July 21, 2009

in Investments

The WSJ had an interesting story about a financial innovation known as “Save to Win“, last week. This is a program created by finance professor Peter Tufano of Harvard Business School, who has developed a cross between a savings program and a lottery.

Under the – Save to Win, program, participants can enter a lottery just by depositing money in their savings account.

This program is designed to attract people towards thrift and saving, and has already attracted $3.1 million in the 25 weeks that it has been running.

How does Save to Win work?

Save to Win is a special savings account offered at eight credit unions to Michigan residents. It is a conventional one year certificate of deposit, and on top of that, also gives you the chance of winning a monthly prize and an annual $100,000 jackpot.

It gives you interest also, but the interest rate ranges from 1 to 1.5%, which is slightly lower than what others offer.

Each month every credit union will give 8 small prizes to its eligible Save to Win members, and at the end of the year, there will be one lucky draw for a $100,000 prize. The credit unions will also give two extra prizes in the months of March, June, September and December.

To win the monthly prize, you need to make a deposit of at least $25 in a month. So, you are eligible to win the prize if your account balance at the end of the month is at least 25 dollars more than what it was at the beginning of the month.

One member can have up to 10 entries per month, with every $25 increase corresponding to one entry. That’s the cap on the number of entries per month that a single member can have.

Here are the monthly prizes in the Save to Win program:

  • 2 winning entries to get $100 cash prize
  • 3 winning entries to get $50 cash prize
  • 2 winning entries to get $25 cash prize
  • 1 winning entry to get $15 cash prize

For the months of March, June, September and December, there are two extra prizes:

  • 1 winning entry to get $400 cash prize
  • 1 winning entry to get $15 cash prize

Here is a link to all other rules of the Save to Win program.

Participating Credit Unions in the Save to Win program

Central Macomb Community Credit Union

Christian Financial Credit Union

Communicating Arts Credit Union

E&A Credit Union

ELGA Credit Union

Frankenmuth Credit Union

NU Union Credit Union

Option 1 Credit Union

Save to Win sounds like a very interesting and novel way of enticing people into saving. It looks like the goal of the program is to get people from stop wasting money on lottery and get them into saving for retirement or other such things.

If anyone has any experience with this program or any such similar program, please share, as it would make an interesting story.

Views: 8962


Get free daily updates in your email:






{ 3 comments… read them below or add one }

jason July 21, 2009 at 5:10 pm

This is a good idea, in my opinion. If this is what it takes for people to save more banks should follow.

Reply

Manshu July 21, 2009 at 5:47 pm

@Jason: I liked the idea too and it will be interesting to see if other banks follow it too. I was planning to research how the credit unions will make money out of this scheme but haven’t got to that yet. I guess that will be the major factor in banks deciding if they wanted part of this scheme or not.

Reply

jason July 21, 2009 at 8:15 pm

Make sure to post an update if you do find out…

Reply

Leave a Comment

{ 1 trackback }

Previous post:

Next post: