Save-To-Win Bank Accounts Increase Savings

October 25, 2014 -

Low interest rates have left banks looking for atypical incentives for people, and casino-style raffles can be a strong option.

People who have bank accounts in the United States and many other parts of the world can all tell you one thing: Interest rates aren't doing so well for savings accounts. Along these lines, a lot of people have been avoiding putting money in these accounts, and banks are looking for incentives that could boost these deposit levels. One option that could be coming in the US that's worked in other parts of the world is casino-style raffles.

In 2005, the First National Bank in South Africa had a great idea. They started a promotion that offered people who saved money an opportunity to win more than 100 different prizes each month. The first place prize was 1 million rand, an amount that worked out to around US$150,000. What happened was pretty incredible because inside of a year and a half, they had increased the rate of their customers' savings on average by more than one percent of their total income, and this represented an increase of savings of about 38 percent total. This is a pretty big deal because the poverty levels for these customers were pretty substantial.

In the United States, these types of accounts are currently illegal. However, a bill that recently passed in the House of Representatives back in mid-September could change that. This bill only needs to pass in the Senate to be up to President Obama for signing to allow these raffle promotions to increase savings deposits.

It's looking like there are some pretty significant chances of these offers becoming legal in the United States during a time where the government has really been pushing savings as a part of economy recovery. On top of that, credit unions can already offer these types of promotions, and for banks to stay competitive, they're going to need to be able as well since more people than ever have been moving from banks to credit unions in recent times. Overall, it'll be interesting to see what happens considering that these promotions have been running in places like the United Kingdom for quite a while with success.