ST. PAUL, Minn.–Since the beginning of the year 2,900 Minnesotans have opened the prize-linked savings account WINcentive Savings at credit unions all over the state.
More than $1.3 million has been saved in total; the median account balance being $225.
WINcentive Savings is the first prize-linked savings account to launch in Minnesota since legislators passed a new law last year allowing financial institutions to incentivize consumers to save by offering risk-free rewards. WINcentive prizes are offered on a monthly, quarterly and annual basis - up to $5,000. Account holders can qualify for up to four chances per month for each $25 increase in their savings balance.
According to the Minnesota CU Network, key findings from a survey of WINcentive Savings accountholders show:
- Fifty-two percent of respondents meet the basic definition of financial vulnerability. Basic financial vulnerability is characterized by having one or more of the following characteristics: low or middle income, no regular savings, or few liquid assets.
- WINcentive is attracting many CU members to their first-ever committed savings product. Seventy-seven of respondents do not currently have a share certificate or CD, and 50% have never had one. Eighty-six do not currently have a holiday club account, and 77% of all respondents have never had one.
- Fifty-five percent of respondents have high debt. While most respondents have middle or high income, 55% have debt above $10,000, and 31% have between $1 and $10,000 in debt. Only 14% of respondents are currently debt-free.
- Fifty percent of all respondents don’t have emergency savings to cover three months of expenses.
- WINcentive attracts new members and strengthens relationships between members and credit unions. Twelve percent of respondents joined a credit union for WINcentive; 80% said WINcentive makes them more excited about their credit union; and 62% of respondents said that building savings would make them more likely to use other financial products at their credit union, the Minnesota Network reported.
The statewide WINcentive prize-pool, facilitated by MnCUN, has awarded 256 total prizes equaling $31,000 to date.