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How Credit Unions And Banks Are “Gamifying” Savings

Nobody wants to play games with their investment dollars, but what if the game was rigged so you couldn’t lose?

Credit unions in five states have come up with a savings account – remember them? – that includes a chance to win monthly, quarterly and annual prizes in lottery-style drawings, while never touching the money you put away for a rainy day.

The next- generation savings accounts are called “prize-linked savings,” or PLS. Just put $25 in an account at affiliated credit unions and you earn entry in a lottery where the cash reward is anywhere from $25 to as much as $10,000.

“Saving money is hard, so we’re trying to come up with ways to make it fun, while offering people an opportunity to prepare for difficult financial situations,’’ Nick Maynard, senior innovation director at Doorways To Dreams, a non-profit organization which helped design the PLS programs.

Laws Have Changed

Contest incentives like lottery tickets used to be banned under federal law, but Congress effectively lifted the ban last December when it approved the American Savings Promotion Act (ASPA). The law allows banks and credit unions to offer promotions with prizes for savings accounts. The only stipulation is that state regulators must approve the game.

Banks have been reluctant so far to take advantage of the chance to promote PLS programs. There are several national banks offering cash bonuses for savings account deposits – ranging from $25 to $500 – but most of them come with difficult conditions tied to large deposit amounts and time the account must stay open.

Chase Banks, for example, will give you a $200 bonus for opening a savings account with a $15,000 deposit and maintaining it for 90 days. Capital One offers bonuses between $50 and $500 for deposits between $5,000 and $50,000 and 90 day stays.

Credit Unions, however, are taking the innovative approach. Five states already had altered laws to allow the lottery-style drawing when the ASPA was signed by President Obama in December. Michigan credit unions were the first, starting a “Save To Win” program in 2009. More than 11,000 people signed up the first year and saved over $8 million.

Lottery Games Follow Format

Nebraska, Washington, Connecticut and North Carolina have since followed with similar Save To Win program, which now have more than 50,000 unique users who have saved $100 million. Seven other states have passed legislation approving prize-linked savings, including New York, Rhode Island, Maine, Oregon, Minnesota, Virginia, Indiana and Maryland, but no credit unions in those states have set up programs yet.

In the five states where programs are in play, credit unions use the same basic formula:

  • Customers receive one lottery entry for every $25 deposited each month, with a maximum of 10 entries per customer, per month.
  • Interest rates for accounts are set by each credit union.
  • Part of the interest on each customer’s deposit is pooled and used as prize money for the monthly and quarterly drawings. North Carolina also has an annual drawing.
  • Prize amounts for each state vary from $25 for monthly drawings to $5,000 for quarterly drawings to $10,000 for North Carolina’s annual drawing.
  • Contestants must be 18 years or older and maintain a balance of $25 to be eligible for each drawing.
  • Contestants are eligible to win more than one monthly, quarterly or annual drawing each year.
  • Accounts must stay open for at least 12 months. There ar e no service fees, but there are penalties for early withdrawal.

Reasons People Save

PLS programs are part of a nationwide effort to lure customers back into using savings accounts. Savings rates – the proportion people save from disposable income – were only 4.1 percent in 2014, a far cry from the 10 percent people saved back in the 1960s and ‘70s.

Even more alarming is the fact that 25 percent of Americans don’t have a savings account. Most are lower-and-middle income families who can’t afford to get hit with an emergency situation like debt from home or car repair or unexpected unemployment.

With little or no savings available, they may have to raid their 401(k) plan, take on credit card debt or resort to payday lenders to bail themselves out of the crisis.

“We know from surveys that 46 percent of Americans – almost half the people in the country – don’t think they could handle an unexpected crisis costing more than $2,000,” Maynard said. “That is troublesome.”

Next Stage? Gamifying Savings

Doorway To Dreams has more ideas for incentivized savings programs. They are trying to “gamify” savings by using space on reloadable debit cards for electronic games designed to motivate consumers to save money. Maynard said the games will be similar to those found on Fit Bit applications that help consumers achieve fitness goals like walking 10,000 steps.

“Only our games steer you toward saving money, even if it’s only a penny,” he said. “Different people are motivated by different things. We’ve had a lot of success with our field testing of these video games.

“The goal is to be part of a toolkit that can help people improve the outcome when they come up against difficult financial times.”

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

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    1. NA, (2014, December 12) Text of the American Savings Promotion Act. Retrieved from
    2. Cohen, P. (2014, August 30) Using Gambling to Entice Low-Income Families to Save. Retrieved from
    3. NA, ND. 2015 Prize Distribution by Program. Retrieved from
    4. NA, ND. Current Savings Account Sign Up Bonuses. Retrieved from