Imagine if there was a way to encourage more people to create and grow their personal savings. If money deposited in a savings account also provided opportunities to win more money at the end of each month. Plus, the more you save, the more chances you have to win! That’s the thinking behind Prize-Linked Savings, a kind of raffle-based incentive to promote savings. It’s sometimes called a “no-lose lottery” because even if you don’t win additional prizes, the money put into the account is safe and the deposit maintained.
In Britain, one out of every three people has a prize-linked savings account1. In New Zealand, a million savers2 have the chance to win a million dollars3 every month, along with many smaller prizes.
In the U.S., a growing number of states have passed laws to allow credit unions to offer prize-linked savings accounts to their members. Research from those states shows prize linked savings accounts are successfully encouraging more people to save – participants in the program managed to stash away on average more than $5004, and left it there for at least a year. The success of the program has resulted in more financial institutions wanting to offer prize linked savings. Unfortunately, outdated federal regulations prevent them from being offered on a wider scale.
You can help make a difference by encouraging your Senators to cosponsor and vote in favor of bipartisan legislation called the “American Savings Promotion Act.” The Act would remove the barrier and allow for expansion of the program to all federally chartered financial institutions, while maintaining the strong consumer protections that exist for savings accounts. This legislation passed the U.S. House in September 2014, and a companion bill has been introduced in the Senate. Democrats and Republicans in the public and private sectors have come together to sponsor and promote this legislation. Contact your Senator today and help this legislation move forward.