To earn 2.00% APY, you have to meet the following requirements: If you dont meet the minimum qualifications during a given month, the dividend rate drops to 0.25% APY. Interest rates on high-yield savings accounts dropped in recent years partially because rates on loans dropped during the Covid-19 pandemic. Note that with bank bonuses generally, youll have to pay taxes on the bonus. A Primary Savings account from Service Credit Union lets you earn up to 5% APY. WINcentive Savings is a Prize-Linked Savings product offered in Minnesota by the Minnesota Credit Union Network (MCUN) that launched in January 2016 at 14 credit unions. Most banks dont charge any account fees to have a prize-linked account. Whether you want to build an emergency fund or sock away money toward other financial goals, a high-yield savings account is a promising option. Consumers allows you to earn 1.50% APY on your existing balance and on deposits of up to $1,000 per month. You will need to be at least 18 years old to participate and use a participating bank or credit union. For every $25 a customer saves, they are entered into a prize drawing that either occurs monthly, quarterly or annually. Prize-Linked Savings Accounts Could Help Iowans Save More CONTACT: Emily Caropreso, Director of Communications & Marketing, Iowa Credit Union League 515.221.3015 If you have multiple options, compare the account deposit rules, potential fees, and prize frequency. The Fed issued seven rate hikes in 2022 and has already hiked rates this year as well. See NerdWallet's picks for the best high-yield online savings accounts. Heres how these accounts work and what to know about them. All investing involves risk, including loss of principal. Depending on the number of other entrants and the size of the prize, your chances of winning may be pretty low. Pros For example, a high-yield savings account is a good place to park your emergency fund. An early form of PLSAs first appeared in the U.K. in 1694 as a means to repay military debt. RAISE Texas is working to expand these programs for Texas families and we need YOUR help! There are other ways to save while earning an excellent rate, including: In terms of where youre most likely to get the best rates on these accounts, online banks tend to trump traditional banks or credit unions. The amount of money that you can win depends on what type of account you open. They open a PLSA. Prize-linked savings accounts work like traditional savings accounts that pay a fixed interest rate on the money you deposit in your account. The typical prize-linked savings account works like this: You'll have to pay taxes on your winnings according to federal and state laws. You should consider opening prize-linked savings accounts in these instances: Use a regional credit union savings program like Save to Win can be your best option if you prefer local bank access. Sweepstakes in general usually have a stipulation in the fine print that no purchase is necessary to enter. Prize-linked savings accounts let customers enter raffles for cash prizes by making deposits into a savings account, CD, or savings bond. Money Smart for kids. You might use a high-yield account to save for: You could use a travel rewards credit card to pay for those expenses and potentially earn some money back in the form of travel miles or points. P.O. Chip has a cash savings account that pays more than most high street banks and gives you access to a prize account. Here are some examples of these accounts from around the country. Tara Krejcarek, a spokesperson for one such program called Savers Sweepstakes, says prize-linked accounts help consumers improve their financial well-being. How Do Credit Union Savings Accounts Work? Balances between $25,000 and $100,000 earn 0.25% APY. The Forbes Advisor editorial team is independent and objective. They're awarded monthly and quarterly. But these alternatives can be a better fit for your money goals. Yotta is okay but now has some more chances with their debit card/checking account that randomly pays you back a debit purchase sometimes. 1No risk - There are no hidden fees or charges made by PrizePool. Your financial situation is unique and the products and services we review may not be right for your circumstances. Something went wrong. A prize-linked savings account is a savings account that's tied to some type of financial reward, usually a cash prize. High-yield accounts are usually found at online banks and credit unions. If your local credit unions offer prize-linked accounts, its most likely with the Save to Win program. The most obvious pro or advantage is the opportunity to earn cash. Prize-linked Savings Accounts (PLSAs) put a twist on this by using the effective interest rate in a different way. the drawing since a customer can only win one prize per drawing. If youdont win a lottery, oftenyouve lost all the money you paid for the lottery tickets. Prize-linked savings accounts are not as common as traditional banking products. Yotta members have already won over $12 million. Kevin Payne is a personal finance and travel writer who covers credit cards, banking, and other personal finance topics. This sweepstakes is offered by certain credit unions in Wisconsin and for every $25 that a member grows their monthly balance, they are entered into a monthly, quarterly and annual cash drawing. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. Have direct or mobile deposits or ACH credits totaling $500 or more each month to a CCU Checking account. Instead of going to the gas station and buying $25 of Powerball tickets, you put the money into an interest-bearing savings account that can win cash prizes. The Chime Visa Debit Card is issued by The Bancorp Bank or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. But because they are typically available only through online banks, high-yield accounts generally dont offer in-person support. Best Places To Save Money and Earn Interest, Prize-Linked Savings Accounts: Offering Incentives to Save, Using the Lure of a Lottery to Spur Savings. Theyre not. You wont lose money with a prize-linked savings account, in most instances. International Studies and Political Science with a minor in Spanish (he studied abroad in Sevilla, Spain for 3 months), Josh decided to sell his soul for seven years by working in the transportation industry to get out of debt ASAP and focus on doing something else with a better work-life balance. They fill the urge to win without having to lose any money. A tax-advantaged retirement or investment account typically offers better returns and tax savings not found with high-yield savings accounts. Read our full Consumers Credit Union Review. The Lucky Savers program for New York credit unions has similar deposit and withdrawal rules as Win to Save. Since its an online bank, Marcus doesnt have a branch network, but customers can access their account via the banks website, mobile app and phone. Easy as 1, 2, 3. The hopeful winner joins a participating credit union or other financial institution. These prizes are funded by . 2023 USA TODAY, a division of Gannett Satellite Information Network, LLC. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. Entry is achieved by making deposits into them. It led to 11,666 new accounts by the end of its first year and generated $8.56 million in savings, or $734 per depositor. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. Content, strategic partnerships, and growth @FinTechtris. There are no monthly fees or fees for domestic wire transfers. Typically, the laws include requirements specific to the prize that is linked to the savings accounts, disclosure requirements, and the role of the banking commissioner. Essentially, a prize-linked savings account is a form of a lottery ticket you're given in exchange for saving money. Interest is compounded daily and credited monthly. From 2009-2018, credit union members opened over 82,000 prize-linked savings accounts and saved over $190 million. When inflation results in higher prices, your actual savings balance doesnt change but that money loses some of its spending power. Depending on the program, you can pick the winning numbers for each ticket. The National Credit Union Administration (NCUA) extends similar coverage to deposit accounts at member credit unions. Walmarts Prize Savings. The prize amounts can be between $10 and up to $10 million in cash prizes. Get more smart money moves straight to your inbox. These accounts aren't available in all states and are more commonly found at credit unions. Make sure the account has low or no fees and that its services are accessible to you via branches, ATMs or online services. He is the budgeting and family travel enthusiast behind Family Money Adventure. Miss the thrill of potentially winning the nearly $1.34 billion Mega Millions jackpot? Our partners cannot pay us to guarantee favorable reviews of their products or services. Save to Win. Save to Win is a program offered by a nationwide selection of participating credit unions. Pre-qualified offers are not binding. Every $1 you have in your account you receive one ticket per day. On average, you can expect to win $25 from a weekly drawing and up to $5,000 on a quarterly giveaway. There are typically minimum requirements you need to meet to have a chance at winning money. This paper investigates whether prize-linked savings (PLS) accounts, common outside of the U.S., 1,2 can encourage savings, especially among those who are more vulnerable to routine financial shocks. Acorns can round up your payment card purchases to the nearest dollar and invest the difference. If youre not sure you can always consult with a financial advisor and create the right banking strategy to help you reach your financial goals. Digit is a micro-savings app that withdraws small amounts of money from your checking account. Banking services and FDIC Insurance coverage provided by Evolve Bank & Trust, Member FDIC. Drawbacks to prize-linked savings accounts.