LIVONIA, Mich.—When the Michigan CU League launched Save to Win 10 years ago, the objective was to find a new way to inspire people to build savings. No one had any idea that a decade later it would become so big and inspire so many.
Save to Win, the national prize-linked savings program managed by MCUL’s CU Solutions Group (CUSG), has awarded more than $3 million in prizes and attracted $250 million in savings from credit union members since its inception through the first half of 2019. It has most recently announced expansion into Georgia.
“As the program grew we realized the secret sauce is we we’re gamifying savings,” said David Dean, chief operating officer, CUSG marketing solutions.
Indeed, a promotional video for the program notes that many people would rather spend money on lottery tickets for the thrill of potentially winning money.
That prize-linked savings approach—offering members a 12-month share certificate that allows unlimited deposits throughout the year and which qualifies them to win monthly and quarterly cash prizes—requires a small $25 deposit. Account holders earn a raffle entry for every $25 deposited in the account, up to a maximum of 10 entries per month.
How Things Started
The program started in 2009 with eight credit unions in Michigan, and over the last 10 years has expanded to 127 credit unions in 16 states.
Looking back on the early years, Andre Mello, sales manager with CUSG marketing solutions, said the league got the idea for the program from prize-linked savings programs it had seen in U.K. and South Africa.
“These programs were very successful overseas, and we learned that Michigan had very favorable legislation regarding prize-linked savings,” recalled Mello.
In its first year, Save to Win generated 11,000 savings accounts and $8.5 million in savings, awarding $100,000 overall in prizes. “So we started in Michigan, reaching out to a few credit unions we had strong relationships with, and created the program,” said Mello.
Early Appeal
Dean said the appeal to consumers was clear very early.
“People were interested because they know their savings will build interest, and they keep the money they invest and still get the chance to win up to $5,000 each quarter,” he said. “Consciously, and even subconsciously, the program triggered the things in people’s minds that make programs like lotteries work so well. But those things, unfortunately, end up so bad for people. We turned the tables on that.”
Mello said that 10 years ago, and more so today, the league believed strongly the program fits right with the mission of credit unions, helping members create better financial habits and save money.
David Dean
“The results show that,” he said.
Survey responses from 1,280 Save to Win members from March 2016 to February 2019 show 75% of respondents meet the basic definition of “financial vulnerability.”
First-Ever Accounts
“Basic financial vulnerability is characterized by having one or more of the following: low-middle income, no regular savings, or few liquid assets,” said Mello. “Save to Win is attracting many CU members to their first-ever highly committed savings product. Before participating, 76% of participants did not currently have a CD, and 56% of participants had never had one.”
Not surprisingly, the study also found 64% of respondents don’t normally save regularly. The majority of participants are low-to-moderate income, but even many of those with higher earnings still possess one or more characteristics of financial vulnerability, especially high debt levels, explained Dean.
“Eighty-seven percent of respondents meet the expanded definition of financial vulnerability,” Dean said. “This category describes consumers with one or more of the following: low-middle income, no regular savings, few liquid assets, high debt, and insufficient emergency savings.”
The study shows 42% of all respondents have household incomes of $60,000 or more, 21% fall within the $40,000-$59,000 bracket, and 37% are at less than $40,000. Forty-nine percent have high debt.
One Key Challenge
Mello said a key challenge to expanding the program over the years has been each state’s rules regarding prize-linked savings. Legislation must already be in place or enacted to allow for prize-linked savings programs. CUSG carefully reviews the new laws to make sure Save to Win is aligned with the state’s rules.
“That's what makes this challenging—to be able to understand all these different states’ laws, make sure we are abiding by the states’ laws, while still giving credit unions the opportunity to be able to participate in the program,” Mello said.
CUs participate by paying an entry fee.
What’s Ahead
Mello believes Save to Win will only continue to grow and at an even faster pace as CUSG makes changes to the program that will allow for greater digital participation.
“We have only 129 credit unions participating, so there’s a lot of room to grow,” said Mello. “There's a lot of things we’re thinking about doing to keep Save to Win more front and center with members—perhaps tying the program to digital banking and creating easy ways for people to move money from their regular savings account to their Save to Win account. We could use alerts to let people know they may not be maximizing their opportunities for entries…There are many ways we could push the program forward into the future.”