LIVONIA, Mich.-Prize-linked savings may be just what some members need to begin moving ahead with a sound financial future.
CUcorp believes that, and is expanding its unique Save to Win program in 2010, hoping to go nationwide in 2011, CEO David Adams told Credit Union Journal. "We are just getting started with this. The goal is to help people of modest means save. Clearly we are lending a hand to people who are struggling, borrowing too much and not saving enough."
Run by the subsidiary of the Michigan CU League and eight Michigan CUs last year, Save to Win allows members to add monthly deposits to a one-year CD to gain chances at an annual $100,000 grand prize. For each deposit of $25 or more, members earn one entry into the grand prize drawing and become eligible for monthly prizes. Rates for the CDs vary based on each credit union's pricing. Most are near 1% APY.
Last year's CU participants were Central Macomb Community CU, Clinton Township; Christian Financial CU, Roseville; Communicating Arts CU, Detroit; E&A CU, Port Huron; ELGA CU, Burton; Frankenmuth CU, Frankenmuth; NuUnion CU, Lansing; and Option 1 CU, Grand Rapids.
CUcorp's statistics show Save to Win reached its intended audience: 50% of last year's participants had not been regular savers, 59% regularly played the lotto, and the average income was less than $40,000. Save to Win attracted 11,000 accounts in 2009 for $9 million. This year the program's rules are the same, and CUcorp hopes to expand to 100 credit inions - 20 are currently on board. Adams said CUcorp will support Save to Win with a $700,000 statewide advertising campaign this summer and fall, and will waive a credit union's annual participation fee for the first year, which ranges between $1,500 to $10,000 based on asset size.
Chris Day, SVP-marketing for the $840-millon NuUnion in Plymouth, Mich., said the product is right for the times-both for members and the CU. "Credit unions are in a unique position to help more consumers become disciplined savers and build their personal assets," he said, noting that in 2009 NuUnion opened 1,600 Save to Win accounts for $1.5 million. "We found these people will build strong relationships with you, averaging four services per member - 40% have a loan and 67% have a checking account."
One such NuUnion member, 86-year-old Billie June Smith, won last year's $100,000 grand prize. She told Credit Union Journal that Save to Win encouraged her to put money aside. The savings, and her prize money, will go a long way toward helping her children and paying off debt she ran up on credit cards to improve her home, she said. "This is fantastic. I cannot believe it."
In addition to the CUcorp, last year's Save to Win pilot was supported by a partnership among the Filene Research Institute and the D2D Fund. In 2010, Save to win will be run by CUcorp and CU Village, a technology and marketing CUSO owned by 18 credit union and credit-union-related organizations.
