Skip to content. | Skip to navigation

Personal tools


You are here: Home / News / Kearney on incentives for saving money

Kearney on incentives for saving money

Saving money while winning prizes is an incentive that customers are not biting on

Elaine S. Povich writing a Stateline article published by Pew Trusts reports on efforts by 29 states to permit credit unions and banks to offer lottery-like prizes to entice customers to save. These prizes are intended to attract low-income populations who are not regular savers to start saving money. Savings accounts pay little interest, but every time a customer deposits money, they become eligible to win a prize. However, even with the incentives customers are not saving money. According to Prosperity Now, a progressive group that tracks wealth and income data, Americans don’t save money: Approximately 58 percent of U.S. household just save for emergencies. 

Povich draws on Faculty Associate Melissa Kearney's experience measuring incentivized outcomes. “It’s pretty appropriate to think of them as appealing to consumers’ interest in lottery-like products. . . . . The expected return is positive, which makes them a better return than lottery tickets. Evidence suggests this is appealing to people and it will pull people into savings that might otherwise have been gambling or buying lottery tickets instead.”

See the complete Pew Trusts article

Filed under: , ,