Neighborhood Credit Union, the oldest financial cooperative in Dallas, recently presented a Texas-sized prize to a lucky member.

A giant $10,000 check was delivered to the home of Jennifer Ingram, who participates in Neighborhood CU's Prize Savings Account, which rewards members for good saving habits, the credit union said.

Members are eligible for grand prizes of $1,000 monthly, $10,000 quarterly and $25,000 annually, along with smaller cash awards, digital cameras, plasma TVs, iPads and other rewards, the credit union said.

“We launched our Prize Savings Account in 2007 during a time when the national savings rate was at historical lows and we gave away our first grand prize of $25,000 in 2008,” Carolyn Jordan, senior vice president of remote services and member development for the $350 million institution said. “In 2012, we expanded the program to encourage our members to save more throughout the year and began awarding $10,000 each quarter.”

Since the program's inception, Neighborhood CU has invested more than $300,000 in cash and prizes, including about $92,000 earmarked for this year, Jordan said.

Earlier this year, the credit union awarded $25,000 to member Adam Kobos.

“In addition to prizes, the cooperative pays dividends on the Prize Savings Account,” Jordan said. “The current APY is 0.15%.”

The account, which is among many innovative savings rewards programs that entered the market in the past five years, has paid off in many ways for members and the credit union, she said.

“We are investing in our members and helping them enhance their financial well-being through smart, consistent saving,” Jordan said. “The great news is that it's working. Prize Savings has experienced double digit growth over the past few years.”

“We grew 12% in 2011, 23% in 2012, 15% in 2013, and we are on target for a growth of 17% this year,” she continued. “The cost of funds on our Prize Savings Account is 0.27%, including the cost of prizes and dividends.”

The credit union has experienced other positive growth figures, according to financial performance reports posted on the NCUA's website.

As of June 30, Neighborhood CU reported 8.43% market share growth, 22.39% loan growth and 5.12% membership growth. And despite the gains in deposits, the credit union's loan to share ratio has increased to 63.90% as of June 30, up from 53.30% a year earlier.

The program has also made a positive impact on many members lives, Jordan said.

For example, the first winner was a young woman who used the money to attend nursing school.

“We helped that member achieve her dream of becoming a nurse,” Jordan recalled. “It was such a joy to surprise her with something that was meaningful and that made a real difference for her future.”

The rules of Prize Savings Account are fairly simple, according to the credit union.

For every $25 of the monthly average balance in a Prize Savings Accounts, the member receives one drawing entry and winners are randomly selected, Jordan said.

“So the greater the savings, the greater the chance of winning,” she added.

For the annual $25,000 drawing, the number of entry tickets for each participant was determined by the average monthly balance in the savings account at the close of business December 31, she said.

Overseeing the program requires attention to detail, she said.

“From an accounting perspective and in accordance with Truth-in-Savings, the prizes are considered as dividends or interest,” she explained. “At the end of the year, we issue a 1099-INT to members who have won prizes. Accordingly, this is not considered a part of our marketing budget.”

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