Last year, Billie Smith, an extremely nice 86-year-old lady from Michigan made a few $25 deposits. Today, she won $100,000.
Billie is one of 11,666 members at eight Michigan credit unions who opened a Save to Win account in 2009. Each $25 deposit in a special savings account entered the saver in drawings for monthly prizes as well as today’s $100,000 grand prize. Altogether, they saved $8.56 million dollars.
Each $25 in Save to Win money is more than just a little savings and more than just a raffle entry. It’s a vote—a vote for personal and family improvement, a vote for stability. So congratulations, not just to Billie, but to all 11,666 credit union members and for each of their 342,400 votes.
And our special thanks to each of the Filene partners that helped Save to Win get all the way from zero to Billie. What a great ride.
The 2009 Save to Win program was made possible by a partnership among the D2D Fund, the Filene Research Institute, and the Michigan Credit Union League. The program is underwritten by a grant from the Center for Financial Services Innovation’s (CFSI) Nonprofit Opportunities Fund, which is generously supported by The Wal-Mart Foundation .
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Comments
5
Awesome! Kudos to the Michigan credit union group for getting this off the ground and moving it to success!
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What a great idea. It is an excellent way to encourage people to put dollars into savings, even small amounts like $25. Applauses for the think tank that came up with the idea and for all the businesses that supported it.
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Save to Win was a wonderful example of how credit unions can collaborate on big ideas. Congratulations to Billie and the eight credit unions that made this idea come to life!
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I don’t know enough about how deposits are priced to be able to determine the impact of a $100,000 giveaway out of $8.56 million.
It would be interesting to see a breakdown of the financial mechanics of this type of promo — specifically how prize cost + marketing cost impacts the interest rate that can be offered on savings. I imagine that it’s harder to offer a super competitive rate, but I could be wrong.
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@Jeffry Good question. We haven’t done a quantitative breakdown of the costs, but in practice the rate is lower than comparable traditional products. Ideally the net cost to the credit union is the same: If a normal savings account pays everybody 1%, a Save to Win-type account pays everybody 0.5% or so and the periodic prizes are funded out of the other 0.5%.
This giveaway was partly funded by a grant from CFSI, but international examples, like UK Premium Bonds (which pay zero interest) operate on a self-funding basis. That’s also the eventual goal here.
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