Wisconsin credit unions announce initiative to encourage more saving

By Ralph Chapoco

Sept. 12, 2018

Member Service Representatives Sam Bloedow, left, and Alyssa Benike look over paperwork behind the service desk Monday morning at Glacier Hills Credit Union in West Bend.
John Ehlke/Daily News

WEST BEND — After observing a disturbing trend with respect to household savings in the country, representatives from credit unions have collaborated on an initiative to entice people to save more.

Christine Henzig, the director of communications for the Wisconsin Credit Union League, issued a news release Aug. 31 announcing that representatives from credit unions in Wisconsin and Minnesota have established the Saver’s Sweepstakes, a program that automatically enters participants into a drawing for cash prizes whenever they deposit money into a savings account.

“First, we had to advocate for, and see legislation passed so that the program could operate here,” Henzig said.

Officials modeled Sweepstakes from other prize-linked savings programs developed elsewhere in the country.

“Prize-linked savings accounts are savings programs designed to promote thrift,” said Kelly McDonough, the chief executive officer of Glacier Hills Credit Union. “They are meant to appeal to people who don’t otherwise save money.”

Many individuals in the country face an issue when it comes to addressing unexpected expenses — and the statistics confirm the problem. McDonough said 60 percent of Americans do not have enough money set aside to pay for an emergency that will cost them $500. About 25 percent of Americans have no savings at all.

“Think about how many people play the lottery every week,” McDonough said. “Hundreds of people go out and buy lottery tickets every week, but don’t put $25 in a savings account. This is designed to appeal to those people, who blow $25 on the lottery, but don’t have a savings account.”

The goal is to divert money that people would have spent playing the lottery, or any other type of spending, and deposit that money into a fund they can use when unexpected expenses arise.

Supporters of the program believe Sweepstakes provides a more substantial rate of return for participants’ money. The probability of winning the Badger 5 lottery is about 1 in 170,000, which is effectively, in terms of percentage, zero, according to the SmartLuck Inc. website.

To participate in Sweepstakes, individuals must be members of one of the 14 participating credit unions, and enroll in the program by opening a specialized account. Program participants become eligible for a reward by depositing at least $25 in the account each month. For every $25 they deposit, they will automatically be provided one entry into a drawing for a cash prize the following month.

Representatives have limited participants to six entries within a given month, so $150 is the maximum amount that an individual can deposit into the account while continuing into the program. All deposits within that month are eligible for the drawing in the following month.

There will be 45 winners selected randomly who will be awarded $100 during each entry period. Aside from the possible monthly award, there will be four participants who will win $1,000 every quarter and a $5,000 annual prize. The entries for a specific individual will continue for the quarterly and annual payouts with each $25 deposit during that time, up to the maximum six entries each month.

There are restrictions associated with the account. Depositors must pay a $10 fee for each of the first two withdrawals, and officials will close the account once members decide to take a third withdrawal.

“This isn’t intended to be an account for people to put the money in and take it out like a regular savings account,” McDonough said. “This is intended to have people put money into the account and leave it in to promote that savings.”

At the anniversary of opening the account, people are permitted to remove funds without penalty.

“That is part of the state regulation to promote these accounts as a thrift savings account is to have this withdrawal regulation on them,” said Travis Livingood, marketing director at Glacier Hills.