MADISON, Wis. (3/18/16)--Credit union leagues in New York, Minnesota and North Carolina are reporting statewide successes with prize-linked savings (PLS) accounts.
New York’s statewide PLS program, Lucky Savers, continued to grow at a steady clip, with participants amassing more than nearly $5.2 million in savings through the first five months of the program’s introduction.
In 2014, Gov. Andrew Cuomo signed a law that allows New York financial institutions to offer prize-linked savings accounts. The New York Credit Union Association strongly supported the legislation and worked closely with regulators, the Legislature and Cuomo’s office to ensure its passage.
More than 3,500 New York credit union members now hold a Lucky Savers account, with an average of about $1,470 saved per account.
A total of 37 credit unions throughout New York are participating in the program.
PLS accounts encourage positive savings behavior by offering savers entries into cash-prize raffles each time they save a certain amount of money. Most PLS programs hold raffles monthly, quarterly, and annually. The product’s kicker is that, even if a member or consumer doesn’t snag the cash prize, they still win by building healthier savings accounts.
A Lucky Savers account is a 12-month share certificate with unlimited deposit capabilities, and members can open the account with a $25 deposit.
For every $25 in month-over-month balance increases, accountholders earn one entry into the monthly and quarterly prize drawings.
Interest and account value caps are set by each participating credit union, with a maximum of 10 prize-drawing entries per member, per month.
In Minnesota, more than 1,000 credit union members have opened PLS accounts at credit unions since January, the Minnesota Credit Union Network (MnCUN) reported.
During the first month of the WINcentive program, 12 Minnesota credit unions opened a total of 1,095 accounts and members have put $197,721.40 into savings. Eligible accountholders may take a maximum of four chances per month for each $25 increase in their balance. They are able to win $100 monthly, $1,000 quarterly, and up to $5,000 in yearly prizes.
Created by MnCUN, WINcentive Savings is the first prize-linked savings account in Minnesota, after legislators last year passed a law that permits financial institutions to incentivize customers to save by offering risk-free rewards.
Members at nine credit unions across North Carolina saved more than $5.4 million in 2015 through the innovative Save to Win program, according to the Carolinas Credit Union League (CCUL), which earlier this month helped award grand prizes of $10,000 each to three credit union members.
Save to Win brought together nine North Carolina credit unions in encouraging members to save, opening 2,200 accounts and safeguarding $5.4 million in deposits--an average of $2,400 per account.
In 2010, the North Carolina Credit Union League, which in 2014 merged with the South Carolina Credit Union League to form the CCUL, started exploring the launch of collaborative savings program called Save to Win among credit unions in North Carolina. With the program's success in Michigan, the league set its plan for implementing Save to Win. In 2011, N.C. Gov. Bev Perdue signed the Credit Union Savings Promotion Raffle Bill into law.
Sixteen states now authorize financial institutions to offer this product, including New Jersey, Michigan, Rhode Island, Maine, Washington, North Carolina, Nebraska, Maryland, Connecticut, Indiana, New York, Arkansas, Illinois, Minnesota, Oregon and Virginia.