ST. PAUL, Minn.–According to a new study from Commonwealth on the savings habits of Minnesota CU members, prize-linked savings accounts incentivize people to save money for the first time and help change overall savings habits.
The Minnesota Credit Union Network, which offers the WINcentive Savings program, noted the program incentivizes members to save by offering risk-free rewards. WINcentive prizes are awarded on a monthly, quarterly, and annual basis, with prizes ranging from $100 to $5,000, the MnCUN noted.
The program is offered at 23 credit unions across Minnesota and “has established and grown a new pool of savers,” the MnCUN reported, noting since the product launched in the state in 2016, more than 8,250 WINcentive accounts have opened with more than $8 million saved with an average balance of $949.
Commonwealth, a nonprofit dedicated to building financial security and opportunity for financially vulnerable people, conducted a survey of WINcentive participants and found that offering the chance to win a prize is effective in promoting savings habits and also may attract members to their first savings product, the MnCUN said.
“Our research found WINcentive Savings accounts are helping many credit union members save for a rainy day,” said Timothy Flacke, Executive Director of Commonwealth. “The chance to win a prize supports members' savings aspirations, and our findings provide additional evidence that prize-linked savings is effective in enabling financial security.”
Key Findings
Among the study’s findings:
- Since opening a WINcentive account, 65% said they are currently saving a fixed amount regularly every month
- 40% of respondents said that they were saving for a rainy day, 20% said they were saving for vacation, and 15% were saving for retirement.
- Thirty-three percent of respondents said that they did not save regularly prior to opening their WINcentive account. When asked how often they save in their WINcentive account now, 57% of those respondents said that they save a fixed amount regularly and 35% said they sometimes save when there’s something left.
- 67% of respondents who said they did save regularly prior to opening a WINcentive account, nearly half (48%) had only been saving sporadically through the month or whenever they had money left.
Improved Financial Well-Being
“Minnesota Credit Unions are committed to improving the financial well-being of their members and consumers in Minnesota and we are pleased WINcentive is converting infrequent or non-savers into regular savers,” said Mark Cummins, president and CEO of the Minnesota Credit Union Network.