The new accounts are part of the Save to Win pilot program that was created by the Michigan Credit Union League, Filene Research Institute and D2D Fund. The program is a reward-driven savings account program where members of eight participating credit unions get the chance to win a monthly prize and a grand prize of $100,000 by adding deposits to their accounts.
For each deposit of $25, members make into their Save to Win share certificate account, they earn an entry into the monthly and grand prize drawings. Before opening a Save to Win account, the member must fill out a research survey. So far, the statistics from the survey show that 93% of the members weren't saving at all before they opened the Save to Win account. The survey also showed that 42% of Save to Win accountholders have an income of $40,000 per year or less, and 60% admit to spending money on the lottery in the past six months.
"We wanted to find something innovative and get people saving while also gaining unbanked accounts," said Michael Bridges, director of public affairs at the Michigan Credit Union League.
The grand prize drawing will be announced in January. The monthly prizes vary in amount month to month, and the biggest is $100.
NuUnion Credit Union in Lansing, Mich., started the program in March, a little later than other credit unions in the program, and at the end of May had 748 accounts, each averaging $385 in deposits.
"If there's a new program out there, we look at it and like to jump on it if it's cutting edge," said Linda Fliehman, a marketing department representative at NuUnion. "We're about empowering people to reach their goals and wanted to educate people on the value of saving."
So far, NuUnion has had several members win one of the monthly prizes. Fliehman said one winner was so excited because she had never won anything before.
"It feels really great for them," Fliehman said. "They have something to fall back on and for many of them that is something they've never experienced before."
Videos of member-winners and employees discussing the program are also posted on YouTube.
Fliehman said NuUnion has looked at doing other reward-type programs before, but many of them focus on how much money people spend and not how much they save. What the credit union liked about Save to Win was that members can start an account with $25 and the monthly prize money goes into the account.
Even though it's still early on in the program, Bridges said that all eight participating credit unions have been happy with the results. Next year, he said, they will be looking to move the program out to more credit unions and move away from it being a pilot program.
"In 18 weeks, credit union members in the program have been averaging $100,000 per week in money saved. Those are very strong results, especially considering Michigan has been hit hard by the economy."
When NuUnion started the pilot program, the credit union set team goals for what it wanted to accomplish with it. So far, Fliehman said they are 15% of the way there to achieving these goals.
"Even if we don't reach our set goals, if one person learns how to save from the program, then we see that as successful."