ALBANY, N.Y. – Prize-linked savings accounts are now a reality in New York, while legislation in Pennsylvania that would permit the accounts continues to move forward.
In New York, credit unions across the state began launching the new cash prize savings products yesterday. The statewide prize-linked savings program, Lucky Savers, provides credit union members with the opportunity to earn cash prizes for saving money each month.
The program is specifically designed to help low-income individuals and traditional non-savers develop sound saving habits.
According to the New York Credit Union Association, more than 30 credit unions from every corner of the state are offering the Lucky Savers accounts, which are 12-month certificates. Participating individuals are required to deposit a minimum of $25 into the certificate; for every $25 in month-over-month balance increases, accountholders earn one entry into a monthly and quarterly drawing for cash prizes. Participants can earn up to 10 entries into the drawing per month, but there is no cap on the amount of money members can deposit and save.
“There are no losers with this new program, only savers,” said NYCUA President/CEO William J. Mellin. “Lucky Savers is an important program that will entice and encourage New York consumers to save money more often and more regularly. Ultimately, Lucky Savers will benefit the poor, working- and middle-class families who continually struggle to put money away for the future.”
The program is being administered by Save to Win, a product developed by credit union think tank Filene Research Institute and the D2D Fund, a nonprofit organization that tests financial products and builds awareness about the needs and potential of low-income communities.
In 2014, Gov. Andrew Cuomo signed a law that allows financial institutions in New York to offer prize-linked savings accounts. NYCUA strongly supported the legislation and worked closely with regulators, the legislature and Cuomo’s office to ensure its passage. New York is the 5th state to offer a raffle-style savings program.
In Harrisburg, Penn., meanwhile, the state Senate Banking and Insurance Committee reported HB 837 is favorably out of committee, according to the Pennsylvania Credit Union Association. The Association-supported legislation, sponsored by Representative Rosemary Brown (R-Monroe), will allow certain financial institutions to operate prize-linked savings (PLS) programs.