By Ray Birch
DALLLAS—Every time Neighborhood Credit Union hands out a big check for its annual savings program winner, it also experiences a big bump in membership.
The credit union is in its tenth year of offering its Prize Savings Account, which gives one member who has a regular share account with the credit union a great big deposit for that account. Neighborhood CU has handed out one $25,000 check each of the first nine years of the program, and now to celebrate its tenth year the cash has been increased to $49,999.
“That certainly is a lot of money for someone to receive and for a credit union to give away,” acknowledged Marketing VP Jessie Swendig. “When we handed the check to the 2017 winner in January—and we showed up unannounced on the winner’s doorstep and delivered a check like Publisher’s Clearing House—he didn’t know what to say or do. He just looked at the check, looked at us, in disbelief.”
The member, a 76-year-old retiree identified as Jose C., opened his door to find several Neighborhood Credit Union team members on his porch with an oversized check for $49,999.99 made out in his name.
Life-Changing Money
Swendig said that kind of money, even the $25,000 giveaways, is life changing. She said the previous winner was a woman who was able to pay off her home with the money and then retire.
“She cried,” recalled Swendig. “It’s just a great feeling to be able to do something like this for our members, and its especially great when the money goes to a long-time member, like Jose, who won the $50,000. He’s been with us for 30 years.”
The Prize Savings Account pays 15 BPs, so the spread on the funds makes it easy for the $634-million Neighborhood CU to afford the giveback, Swendig said. Members simply deposit money into their regular share account and for every $25 (monthly average balance) they have in their account they receive one entry for each drawing.
There are also monthly $1,000 giveaways and other smaller prizes, noted Swendig. To further celebrate the program’s tenth anniversary, NCU is giving away $1,000 a week to Prize Savings Account holders throughout the entire year. There are also four $10,000 quarterly prizes.
For the $1,000 and $10,000 winners, the credit union calls the members, tells them they’ve won, and invites them to the main office to pick up their check, explained Swendig.
Social Media Impact
NCU promotes Prize Savings through traditional media outlets, such as print, radio and TV, but social media provides the biggest return, Swendig said.
“That is where we make the biggest impact,” she said. “We feel this program is perfect to talk about on social media, because it changes people’s lives. We always tell the stories of our winners, and we always go back and follow up about how they have used the money and how it has helped their lives. We try to make this real for people.”
While members have benefitted, so has Neighborhood Credit Union, averaging about 10% annual membership growth over the last five years. Prize Savings has grown, as well, showing $31 million in balances in 2009 and $182 million and the close of 2018.
Prize-linked savings programs have been growing across the nation as more states allow such programs. But Neighborhood’s account is different, noted Swendig, in that it is a sweepstakes.
Prize-Linked Savings In Texas
“Prize-linked savings programs have not been permitted in Texas until this year. Legislation was passed last year to allow FIs to offer the program,” said Swendig. “It will be interesting to see how many other credit unions in Texas get on board with prize savings accounts. They are fantastic. For members, it’s better than the lottery. They have a chance to win money, but if they don’t they’re saving. They are making their financial lives better, and they are able to pay more of their bills.”
For the credit union?
“We win too,” said Swendig. “You don’t see anyone else doing this here. And people in the community, when they hear about a drawing, want to come to the credit union to be part of the program.”