‘Save to Win’ Marks First Anniversary in Washington with a Milestone: $785,000 in Savings

Saving money can be an overwhelming challenge for people with limited income, even when they understand the path that regular savings can provide to a better financial future. Indeed, nearly 27 percent of all Americans have no savings at all.

So how do you explain the success of “Save to Win,” the prize-linked savings program that celebrates its first anniversary in Washington this month?

“Research has found that by getting a chance to win a prize with each deposit, more folks are more likely to set aside adequate financial resources to be prepared for whatever life throws at them,” says U.S. Rep. Derek Kilmer, who was a state senator when he sponsored the Washington legislation that cleared the way for Save to Win in 2011. He’s now pushing a bill in Congress to give all federally chartered banks and credit unions the same option.

“The bill I introduced, the American Savings Promotion Act, would allow more financial institutions to offer these accounts,” Kilmer says. “The best that can happen is you reap a windfall. The worst that can happen is you’ve saved money.”

And somewhere between “best” and “worst,” Washington credit unions have found, this also happens: Members who may have never had a financial safety net before are getting their cars repaired, buying their first home or planning for a dream vacation.

“Express Credit Union is all about encouraging our members to take that next step, to reach for higher goals, and to put their money to work for them,” says Norma Hernandez, the credit union’s chief operating officer. “Save to Win is an excellent way to help people understand that despite their income level, saving is possible.”

The concept behind Save to Win is simple: Create a kind of lottery in which players can win cash prizes just by saving money — and make it impossible for them to lose a dime.

All of the money members deposit in the 12-month certificate program stays in their accounts, because the prize pool is funded by other credit union resources. As members build their assets, they’re also eligible to win — each $25 deposit earns an entry into monthly and annual drawings, and members can earn up to 10 chances to win every month.

Typically, the monthly drawings award multiple $50 prizes. But on April 14, three $5,000 monthly prizes will be awarded. And later this month, the winner of Washington’s first $5,000 annual prize will be announced.

The Michigan Credit Union League brought the concept to the United States in 2009; Nebraska and North Carolina soon added their own programs. Oregon’s Legislature hasn’t voted to allow prize-linked savings accounts yet, but six Washington credit unions signed on when the program debuted locally in April 2013: Connection, Express, Fibre Federal, North Coast, O Bee and TwinStar.

Just this week, Peninsula Credit Union became the seventh Washington participant, launching its Save to Win program at a celebratory breakfast in Belfair attended by Kilmer and a host of community leaders.

Strategic Link, the NWCUA’s wholly owned subsidiary, funds the prize pool; CU Solutions Group, which operates the program in Michigan, Nebraska and North Carolina, manages the Washington program, too. And if the first-year numbers are any indication, it all appears to be working.

Through the end of February, 834 members had opened Save to Win accounts, with total deposits of nearly $785,000. The average saved per account is about $940. Fibre Federal members have saved the most money, TwinStar has opened the most accounts, and Connection boasts the highest average saved per account.

“Initially, I signed up for the program because I was excited about the chance to win $5,000,” says Mia Alexander, a Connection Credit Union member. “As the months went by and I had my $25 automatically transferred to the account, I did not miss it. And when I received notification of how much the balance was, it was a blessing. I plan to roll it over and continue on with the program.”

That’s exactly what credit unions were hoping would happen. And it’s a pretty powerful statement, given the results of surveys conducted during the first year of Save to Win in Washington. Of the members who participated in the program:

  • 85 percent did not consider themselves “regular savers” before;
  • 83 percent had limited or no emergency savings;
  • 62 percent had less than $5,000 in total assets; and
  • 80 percent were more than $10,000 in debt.

“Creating solid financial management behaviors in households across our nation and in the Northwest is critically important to the financial stability of every family,” says Troy Stang, president and CEO of the Northwest Credit Union Association. “The concept of linking savings with the chance of winning prizes has proven successful in several other well-developed nations around the globe, and studies in this country have proven the same.”

“But more importantly, Save to Win speaks to credit unions’ core mission,” Stang says, “and that’s to help credit union members build financial strength. Credit unions’ priority is to put money back into members’ pockets, and Save to Win is one of the ways the cooperative model is doing that.”

Angie Leppert, vice president of marketing for Fibre Federal, agrees.

“As a low income designated credit union, Fibre Federal has found the Save to Win program to be a great fit, and our members have responded positively,” Leppert says. “Many are building a basic savings account. Others have told us that they are saving to buy their first home, working on getting their car repaired, or hoping to take a dream vacation.”

In a letter to Connection Credit Union’s Claudette Tulp, member Mia Alexander talked about another benefit of the program0. In February, the credit union invited all of its Save to Win participants to a celebratory dinner, prize drawing and raffle.

“What I witnessed was a family gathering,” Alexander wrote. “That evening, Connection Credit Union made me feel like more than just a customer, but as a member of an awesome group that cares about you on an individual basis. I’m proud to be a member.”

That may be one of the reasons why Jessica Demorest, who coordinates Save to Win for CU Solutions Group, says she expects to see the program continue to spread across the country. “The biggest trend now,” she says, “is that more and more states are amending their current legislation to be able to promote prized-linked savings programs.”

A bill that would allow financial institutions in New York to establish prize-linked savings accounts cleared that state’s Assembly last week, and an identical version of the bill has been introduced in the state Senate there. Legislation authorizing a work group to study the possibility of allowing prize-linked savings accounts under authority of the Oregon State Lottery failed to gain support in the just-concluded legislative session in Salem, but Pam Leavitt, the NWCUA’s policy adviser for legislative affairs, says she expects the issue to come up again in 2015.

National media have shined a spotlight on Save to Win, including coverage on CNN and PBS and stories in The Salt Lake City Deseret News and The New York Times. You’ll also find recent coverage of the program in Anthem.

“Save to Win brings real value to our credit unions and their members, and the first year had an incredible impact in Washington,” says Craig Reed, the NWCUA’s director of strategic partnerships. “I think we’re off to a great start!”

For more information about the Save to Win program in Washington, contact Reed at 206.340.4789 or creed@nwcua.org.

Questions about this story? Contact Gary M. Stein: 503.350.2216, gstein@nwcua.org.

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