Here’s a lottery you cannot lose

Imagine a kind of lottery in which players can win up to $10,000, but it’s impossible for them to lose a dime. Such lotteries are now being offered in by 58 U.S. credit unions in four states. Pending federal legislation would allow banks, too, to offer them.


The object of these lotteries isn’t to encourage risk, but to promote saving.

Best savings account for your age group

Called “Save to Win” accounts, they work like this: To become eligible to play, a consumer deposits $25 into his or her credit union savings account. For every additional $25 deposited (up to 10 deposits a month), he earns a raffle ticket, which qualifies him for a monthly prize drawing and for a grand prize drawing if the account remains active for a year. The monthly prizes range from $50 to $100, the grand prize, $10,000.

Losers don’t lose. They just fail to win. They keep all the money they’ve deposited, plus interest (in the form of a CD). The prizes are paid for by the credit unions and their associations as a savings incentive.

Sharon Hall, CEO of Express Credit Union in Washington state, has offered the accounts since 2010. “My credit union serves low-income customers,” she tells ABC News. “We saw a benefit to offering an incentive win component.” So far, she says, feedback from her customers has been 100 percent positive. “I don’t know of a member who doesn’t like it or hasn’t responded well.” Winners, she says, take the money and reinvest it, in hopes of winning a bigger prize.

Save to Win was developed in 2008 by the Michigan Credit Union, in collaboration with the Filene Research Institute and the Doorway to Dreams (D2D) Fund, which promotes financial opportunity for low and moderate income consumers.

Five steps to saving money

The number of accounts has grown from 11,700 in Michigan in 2009 to close to 17,000 now in eight states. The number of participating credit unions has grown from eight to 68, and the amount of money saved per year has increased from $8.6 million (an average of $734 per person) to $45.6 million (an average of $3,000). In all, depositors have saved more than $70 million since the inception of the program that might not have been saved otherwise.

The program is aimed at low-income people who have had trouble saving or have never saved before. Such savers, says Melissa Kearney, an economist at the University of Maryland who has studied lottery-based accounts, told the PBS News Hour her research found the accounts’ game-of-chance aspect leveraged low-income depositors’ desire to win big.

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