Our pockets are tighter than they have ever been thanks to COVID-19. We are now looking for ways to hold on to every penny that we have and make each one grow. This is where prize-linked savings come in. Think of these savings accounts as a safe and fun way to save money and invest it too.
So how do prize-linked savings accounts work?
Why are they the best solution for these tough times that we are facing right now?
What is a Prize-Linked Savings Account?
Now, you’re probably wondering what a prize-linked savings account is and whether it could work for you. Well, simply put, it is a bank account that can allow you to gain returns through investments while also allowing you to enter raffles. To enter these raffles, all you need to do is make deposits into your account. In other words, you can keep your money in a risk-free account and stand the chance to make money while you’re at it.
Prize-linked savings have a proven track record for success in countries around the world. Lottery-linked saving was first introduced in the United Kingdom in the 1600s as a way to pay off war debt. Today, prize-linked saving is available in twenty countries, including Argentina, Germany, and Japan. These savings accounts were implemented in South Africa to increase the country’s savings rate. The savings rates soared and soon outnumbered the tally of traditional savings accounts.
Financial institutions started noticing that Americans struggle with saving money. And yet, in 2019, Americans spent over $91 billion on lottery tickets. By offering prize-linked savings accounts, financial institutions were able to package American’s love for competitions and the idea of saving in one neat package.
How Do Prize-Linked Savings Accounts Work?
Prize-linked savings accounts use the effective interest rate differently. Instead of adding interest to each account holder based on their deposits, banks pool the interest from the accounts. This money is then used to create prize bundles.
Here is how they work:
- To start off, you make deposits into a savings account at a bank.
- The bank gives you tokens or tickets depending on your deposit size or your number of accounts.
- During regular periods they enter you into a raffle where your winning chances are proportional to your account balances.
- When the draw is made, the winners of the raffles are given the prize bundle funded through the pooled interest.
- If you don’t win, your money is still yours. So ultimately, you always win!
Why You Should Choose Prize-linked Savings
We all know saving is important. You need savings for the big moves in life. Whether it’s a down payment on a house or traveling somewhere new, you need money for big moments.
But saving isn’t always easy and modern-day marketing is making it harder and harder to say no. For saving to be possible, you need real motivation to avoid the ‘spend trend’. Prize-linked savings provides all the motivation you need.
Prize-linked saving is a fun, innovative means of saving and offers an alternative return on your investment to traditional interest. It combines the thrill of the lottery with the safety of a savings account.
Here are four reasons why you should open a prize-linked savings account – today!
Incentive for Saving
Currently, the household savings rate in America is 8%. That number may seem quite low, but the thing to remember is that you need to have money to save it. Low- and moderate-income households struggle with saving money because most of the time, they work on a hand-to-mouth basis.
By offering these people the option to save money and win without incurring any major losses, there is a bigger incentive to sign up. Furthermore, they are now given the opportunity to put this money away on a monthly basis. This means that even if they don’t end up winning, they can end up with a substantially large rainy day fund.
Prize-linked saving creates an asset structure which appeals to society’s low savers. By using the same psychology of the lottery, lottery-linked saving motivates people to save by relying on their chances to win big. Therefore, prize-linked saving can turn gambling tendencies into healthy saving habits!
Cultivate Fun Habits
With rising unemployment levels around the world, the last thing the international community needs is more people in debt. Nowadays, it’s better for economies if people save more and spend less. And prize-linked saving could be a grassroots channel to make this possible.
With prize-linked savings, you can develop life-long saving habits that benefit your future. Habits are easier to form and stick to if they’re not boring. You can practice healthy saving habits while being eligible for prizes. Saving can be so much more than a dull bank deposit. Trick your mind into thinking saving is fun!
The Opportunity to Win Money You Didn’t Have
Besides the fact that you get to save your own money, you can also enter a lottery that doesn’t increase the risk of you losing money. Any money that you may make as winnings can be used to cover any expenses that you may have. Any money is a blessing, especially in these tough times. So if you can put your own money and stand the chance to win more, why not?
Reducing the Risk of Losing Your Money
With a conventional lottery system, you put money into the system and only make returns if you win. The great thing about a prize-linked savings account is that you still have your money even if you don’t win. In some cases, the money that you put in can accrue investment value so even if you don’t win the prize, you are still making money.
Why PrizePool Should be Your Prize-Linked Savings Account Choice
In a world filled with pressure and uncertainty, we need to find practical ways of experiencing joy in our day to day lives. By choosing prize-linked savings, you can add excitement to the discipline of saving. Whether you’re a non-saver, super-saver or lottery junky – this is a great option for you.
Here at PrizePool, we recognize that over half of the American population doesn’t have enough rainy day money to cover a $1000 emergency. That may not seem like much. But we all know how money is never there when you really need it. We believe that you shouldn’t be living from paycheck to paycheck. The one way that we can help you escape that monthly cycle is through our prize-linked savings accounts.
The irony of this situation is that most Americans spend some of their money on playing the lottery. But the chances of actually making any returns on that are slim to none. Our philosophy is simple: You can take the money that you were going to use for the lottery and save it with us.
And while you’re at it, we will provide you with many different ways that you can increase the funds in your account. That way, you don’t need to worry about the stress of not having money because your money is always there. Most importantly, we make saving fun. We want you to have a reason to save. So the more exciting the process, the higher the chances of you saving your precious dollars with us.
How much does this all cost? Well, we don’t charge any fees and there is no minimum deposit required. So you can start saving with us whenever you are ready to. So what are you waiting for?
Download today and let us make your lives a little bit easier by helping you with a prize-linked savings account today.