NEW YORK (3/23/15)--For some consumers, tax season provides a windfall to be spent or saved. Southern Chautauqua FCU, Lakewood, N.Y., is taking advantage of a program called SaveYourRefund to encourage members to tuck away some of their federal tax refund.
SaveYourRefund is a twist on prize-linked savings (PLS) accounts: Consumers must submit an IRS Form 8888 to split their federal tax refund between spending and savings. For as little as a $50 deposit into a savings account, certificate of deposit or savings bond, they can be entered into a drawing for weekly cash prizes of $100 and a grand prize of $25,000.
"It's an incredible opportunity for people to recognize the importance of savings and the joy of savings, and possibly be rewarded with free money--and who doesn't like free money?" CEO John Felton told NBCNews.com (March 20).
He said the program helps paycheck-to-paycheck families turn their tax refund into a true asset.
SaveYourRefund is the brainchild of Doorways to Dreams, which also helped incubate Save to Win, the popular PLS program used by credit unions in Michigan, Nebraska, North Carolina and Washington.
NBCNews.com also mentioned the popularity of the Save to Win program and how Peninsula Community FCU, Shelton, Wash., has attracted 291 savings accounts that hold an average amount of $1,768.
"It's been really successfully and we've heard a lot of positive stories about how it's motivating people to do the right thing--save money," Morrell told NBCNews.
PLS accounts encourage credit union members to save by offering them entries into cash raffles each time they deposit a certain amount into savings accounts.