North Carolina may soon be joining Michigan in offering a CU-sponsored lottery savings plan.
A “Save to Win” bill introduced in both houses of the state legislature is making progress with committee hearings still to come, according to the North Carolina Credit Union League.
The league said North Carolina CUs are making plans to “help and encourage people to save money by rolling out a collaborative prize-linked savings program called ‘Save to Win’ that rewards people for saving by offering monthly cash prizes and the chance to win a grand prize.”
The prize-linked savings programs “are very effective in getting people into the systematic habit of saving,” said John Radebaugh, president/CEO of the league.
Radebaugh noted that such programs “have been popular in other countries for many years” and that in Michigan, a program launched in 2009 has already garnered more than $10 million in savings from more than 11,000 members.
The results prove “that credit union members who had not saved regularly before could be encouraged by the possibility of winning,” Radebaugh said.
League officials said the “Save to Win” bills appear to be facing little opposition, including from the banking lobby.
The Michigan participants, said the league, were enticed by monthly prizes and the chance to win a $100,000 grand prize. Participants opened a special certificate of deposit with $25, and then added $25 deposits over the life of the campaign.
The more they saved on a monthly basis (limited to 10 deposits a month), the better chance they had to win a prize.
“Best of all, the deposits the savers made earned interest and the money saved was theirs to keep, so in that sense the program is a no-lose proposition,” said Lauren Whaley, director of legislative and regulatory affairs for the North Carolina league.