It's the "Who can save more" contest!

Last week on WalletPop you read about how I thought banks could encourage savings by telling me I was a good boy! After I gave it some more thought I realized that we need a program similar to what my bank had when I was growing up, the Moola Moola savings club.

This club for youngsters featured contests and events which, in order to be a part of, you needed to deposit a certain amount of money. While my bank no longer participates in the Moola Moola club, I found a bank in Philadelphia which is sponsoring a summer savings program from which they will choose a winner for a Nintendo Wii as well as several other prizes.

There are several reasons that a program like this would be a good idea, the first being that people seem to be suckers for prizes, they'll drop $20 on raffle tickets to support a random charity or at the high school ball game's 50/50 drawing but they haven't even put a drop into savings.

Yes, I really do think that drawings and the competitive nature of an adult Moola Moola program would incentivize people to save. If the banks went a few steps further and allowed people to brag about the number of Moola Moola points they gained on social networking sites then the competitive nature of individuals my age may even spark more people to save in order to get to the top of a Facebook leaderboard.

Don't believe me? I bet you didn't know the Facebook crowd dropped 24 million on virtual gifts as of December 2007; this demographic is ripe for a social networking savings challenge, especially if it gives them a chance to win something!

On the bank side of things, they are already spending millions on giveaways to get consumers to open accounts. In fact, not a week goes by that I don't get an offer from Chase or some other institution offering me an iPod or $100 if I open up a savings account with them. These programs usually have a minimum term you must leave the account open to claim the prize free and clear. The companies lose money on these accounts in the hopes that the new customer will use them when applying for a car or home loan. Alas, a Chase representative I spoke to recently told me that many of these recently-enticed customers close out their accounts after six months or so, or when they're unable to get a favorable loan rate. In the end, the program only ends up sucking dry the bank's ability to retain good customers.

A Moola Moola program for adults could get them to start saving through word of mouth about the programs and the competition and prizes would keep them saving. Since the program would continue to bring money into the bank, increasing their ability to make loans while increasing the customer's account balance, this type of program would be more beneficial to both banks and consumers.
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