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What is Prize-Linked Savings?

Prize-linked savings (PLS) products are an innovative way to help individuals save, linking the fun and excitement of winning to savings. It’s a win-win for consumers – they set some money aside into savings, gain interest and earn chances to win. While there are many prize winners, even those who don’t win a prize are winners – walking away with the savings they set aside and any interest earned. Thus, prize-linked saving products are an exciting way to engage consumers to save without any downside of losing. Prize-linked savings products have been successful internationally, but only a few years ago was the concept brought and tested in the United States.


Prize-Linked Savings in the United States


The idea to test a prize-linked savings concept in the United States came from the research of Peter Tufano, cofounder of Commonwealth fka as the Doorways to Dreams FundDean at Oxford University’s Saïd Business School and former Harvard Business School Professor. In 2006, Commonwealth partnered with Indiana Centra Credit Union to run a small scale pilot of a PLS product and study the first U.S. based prize-linked savings product. The Centra Super Savings Account offered accountholders a chance to win prizes each month, including laptop computers, mp3 players, gift cards, cash and more. Centra launched the project throughout its 22 branches on January 1, 2007, opened nearly 1,400 Super Savings Accounts and collected over a half million dollars in deposits in the first five months.


Building on the success of the Centra experience, D2D, the Michigan Credit Union League (MCUL) and the Filene Research Institute began working in 2008 to launch a large scale prize-linked savings product in the state of Michigan. Michigan offered a unique opportunity to test a prize-linked savings promotion. Unlike many states which require legislative change to offer savings promotion raffles, Michigan’s law already allowed for credit unions to offer them. So, Commonwealth, MCUL and the Filene Research Institute began designing the Save to Win™ [1] program, the first large scale test of a prize-linked savings program in the United States. 


The Save to Win product is designed as a 12-month share certificate that allows for unlimited deposits throughout the year. Only $25 is required to open the account, a low barrier to entry which makes the product accessible to all and attractive to more financially vulnerable consumers. A saver earns raffle tickets for every $25 deposited in the account, with a cap on the number of entries per month. This cap helps ensure that individuals who can’t save as much still have opportunities to win. Raffle tickets qualify participants for the chance to win cash prizes throughout the year.


The Expansion of Save to Win Success in Michigan and Beyond


The Save to Win program officially launched in Michigan in January 2009 with eight credit unions participating in the pilot program. By the end of the 2009 pilot year, the program had successfully attracted more than 11,000 savers to save $8.6 million. The number of participants and amount saved demonstrated the possibility of winning, both a large grand prize and small monthly prizes encourages people to save. The success of the program in its pilot year resulted in an expansion of the program in Michigan and has helped motivate legislative change in new states where credit unions can now offer prize-linked saving promotion raffles.  


In addition to Michigan, several other states now promote Save to Win. The demonstrated ability to replicate Save to Win in other states has been a great success. As new consumers continue to join the program year after year, it shows the potential of the product to be an effective asset building tool for consumers. 


Strong demand exists for the Save to Win program, and it is successfully attracting new participants and engaging them in the act of saving. 


Year    Number of Accounts Amount Saved (In Millions) Number of States Number of Credit Unions
2009 11,666 $8.6 1 8
2010 21,582 $31.9 1 36
2011 31,513 $48.1 1 58
2012 42,073 $72.2 2 68
2013 50,076 $94.3 4 62
2014 53,589 $115.8 4 58
2015 60,200 $138.1 6 63

Consumers are building a longer-term savings habit with their Save to Win accounts, with accountholders rolling over their accounts year after year, which suggests the products stickiness over time. 

Year Account Originally Opened Percent of Accountholders who had open accounts in 2012 and renewed in 2013
2009 96%
2010 85%
2011 79%
2012 71%
Overall 80%

The product is attractive to all, but has features that make it accessible to more financially vulnerable consumers and helps them build savings. 

Financial Vulnerable Consumers in 2013 MI NE NC WA
Non-Savers 45% 42% 52% 61%
Asset Poor 38% 34% 33% 49%
Low-to-Moderate Income 36% 36% 55% 51%
Any FV Indicator 64% 62% 75% 81%

The credit union industry is well suited to incubate and scale a prize-linked savings product, and the collaborative model (with credit unions pooling together) is important to the growth and scale of Save to Win. There are many benefits for credit unions including reaching new members (approximately 7-11% of STW members joined their credit union for the STW product), helping members build assets, deepening financial relationships with members, the ability to cross-sell additional products to more financially secure members, and receiving earned media attention.

While the program has been successful in several states, more research and innovation is required to motivate more regular savings in the product and enhance its take-up and stickiness. For more information on the research being done, visit Commonwealth. The following Commonwealth reports provide more insight into the research and findings from the Save to Win Program, as well as insights into product design for prize-linked savings programs:


Save to Win Survey Data Analysis Report 2017


Save to Win Impact: 2015 Overview


How to bring PLS to your state:

As a result of the success in Michigan, states throughout the country are interested in amending their laws to allow for prize-linked savings products. The following states have passed explicit savings promotion raffle bills:

  • Rhode Island (2010)
  • Maine (2010)
  • Nebraska (2011)
  • Washington (2011)
  • North Carolina (2011)
  • Maryland (2012)
  • Connecticut (2013)
  • Indiana (2014)
  • New York (2014)
  • Virginia (2015)
  • Illinois (2015)
  • Oregon (2015)
  • Minnesota (2015)
  • Arkansas (2015)
  • South Carolina (2016)
  • Arizona (2016)
  • Kansas (2016)
  • Missouri (2016)
  • Louisiana (2016)
  • New Jersey (2016)

If you live in one of these states, great! Generally, you can work with one of your state credit unions and/or credit union league to join Save to Win or develop a differnt type of PLS product. If you do not live in one of these states, there are still options:


1. Legislative change: work with a coalition of financial institutions, asset building non-profits, legislators, and other interested parties to amend the law to allow for savings promotion raffles (i.e. PLS products).


2. Consider other program designs that would allow an organization or financial institution to offer a PLS product without legislative change. For example, several credit unions around the country offer a PLS-type product using sweepstakes rules rather than raffle rules.


Please feel free to contact Commonwealth for more information.


[1] Save to Win is a Registered Service Mark of Commonwealth

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