Financial apps entice savers with the chance to enter regular competitions

Traditionally, financial institutions offered cash or physical prizes, such as toasters, to attract new customers and encourage good savings habits. Now, financial institutions are creating apps and offering accounts designed to encourage people to save money by allowing them to participate in some form of contests or other games of chance.

Whether such gimmicks are a good way to promote good saving habits is a matter of debate.

Some argue that offering prizes can serve as carrots for people who don’t save regularly. “I personally would rather see someone get involved with a rewards-based savings account than play the lottery,” says Hal E. Hershfield, professor of marketing and behavioral decision-making at the UCLA Anderson School of Management.

Critics, meanwhile, argue that consumers would be better off not wasting their time gambling, which can pay less than investing in stocks, for example. “I don’t want my kids to put their money in a premium savings account; I want them to put it in the market,” says Vasant Dhar, professor of information systems at New York University’s Leonard N. Stern School of Business. “Build instead brush up on your investment skills and do some research on sectors or companies before you invest,” he says, “and if you can’t do that, invest in a broad market index like the S&P 500 or the Nasdaq.”

Still, prize-linked savings, used properly, can encourage good savings habits, says Cait Lamberton, the Alberto I. Duran Presidential Distinguished Professor of Marketing at Wharton. If a person is given $1 every day for exercising, she will come to expect it, and the effectiveness of this type of reward diminishes as time goes by, she says. But intermittent rewards are more effective in motivating people to continue the behavior that could generate the desired outcome. The games – and the chance to win – are an entertaining way of trying to drive good financial behaviour, she says.


Would prizes make you more willing to save in an online account? Why or why not? Join the conversation below.

Although linking rewards to savings is not a new concept, it is gaining in popularity. The US Savings Promotion Act of 2014 allowed the use of raffle products by financial institutions to encourage savings and for other purposes. About 30 states allow credit unions and other financial institutions to hold thrift sweepstakes, according to data from the National Conference of State Legislatures.

Still, there are caveats that consumers should consider before moving forward with this type of account. Be sure to read the fine print regarding minimum deposits and withdrawal penalties or conditions. Please read the provider’s privacy policies carefully to ensure that the terms described are acceptable. Consumers should also avoid putting large amounts of money into these accounts, especially for low returns.

Here are some types of premium linked savings accounts available.

Save to win: More than 130 credit unions offer this option to their members. For every $25 saved, a credit union member receives a drawing entry for a chance to win monthly prizes from $25 to $1,000 and quarterly prizes up to $5,000. Some states also award an annual award. About 150 prizes are awarded each month. A minimum balance of $25 may be required to keep the account open. Savers earn a one-year CD rate set by the individual credit union. Members may close their account at any time, but fines may apply. More than $3.5 million has been awarded since the program began in 2009, said Dave Adams, president and CEO of CU Solutions Group, a credit union service organization that administers the Save to Win program.

Yotta Savings: Launched in 2020, this free app offers one recurring weekly raffle ticket for every $25 in the customer’s account. For balances over $10,000, users receive one ticket per $150 on the incremental amount. Customers do not need to add new funds to their accounts to get new tickets. Users select seven numbers for each ticket they receive. Winning numbers are announced daily. Matching three numbers wins 10 cents per ticket; a six-number match wins $40,000. Seven games into the $10 million jackpot, which no one has won yet. You can withdraw your money at any time.

Yotta’s banking partner in the venture is Evolve Bank & Trust, which holds the FDIC-insured money. Except for special promotions, customers earn monthly payments equal to an annual percentage rate of return of 0.20%, based on the average balance from the previous month. By comparison, some of the highest nationally available annual percentage returns on savings and money market accounts at banks as of Sept. 6 ranged from 2.2% to 2.55%, said Greg McBride, financial analyst at

Adam Moelis, Yotta’s founder, says that after factoring in the likelihood of winning a prize, account holders can earn an average annual percentage yield of around 1.5%, which is close to or more than many banks pay, Mr Moelis says . “We’re not the highest rate you can get in the market, but we’re close,” he says, adding that “the vast majority of banks pay in the 0.01% to 0.20% range.”

An account holder can also be lucky and win 10%, or be unlucky and just get the 0.20% base rate. Yotta posts all probabilities and prizes every week on its website. The prizes change from time to time to keep things exciting and mix up the giveaways, he says.

The savings rate for Yotta customers is subject to change at any time, based on what happens to prices more broadly.

Konti offers a debit card and credit card, says Mr Moelis.

Long game: This app, acquired by Truist Financial corp.

in early May, using games and prizes to encourage saving in an FDIC-insured bank account. Savers earn digital “coins” that they can use to play dozens of popular games and win cash. The more users save with their underlying bank, the more coins they earn. Customers do not pay to play games or to use the app. They also earn coins for correctly answering financial literacy trivia questions on topics such as insurance, investments and banking.

Customers can also set personal savings goals, which are broken down into small missions. Completing missions gives users more coins. There is no investment component and users cannot spend actual money in the app. It is free to download and has no fees. The prizes are funded by Truist.

Mrs. Winokur Munk in a writer in West Orange, NJ She can be reached at

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