Bank accounts linked to prizes could be a way to boost low-income household savings, an adviser told a Federal Deposit Insurance Corp. panel Thursday.
FDIC Chairman Sheila Bair said the concept of prize-linked savings matched her goal to "look at any innovations that might be conducive to helping low- and moderate-income people build savings." But she cautioned that no innovation should siphon current savers away from traditional interest-earning deposits.
Prize-linked savings accounts let people deposit funds in an account and become eligible for prizes instead of earning interest. Often a larger balance translates into a better chance of winning a prize.
Harvard Business School Prof. Peter Tufano introduced the idea at an FDIC Advisory Committee on Economic Inclusion meeting.