Love of lotteries used to encourage savings
A new program, Save To Win, rewards those who deposit funds in some savings and loans with a chance to win a drawing in the Michigan Savings Raffle. The grand prize is $100,000 and there are other monthly cash prizes.
The money customers deposit still draws interest, albeit not quite what they could enjoy elsewhere. The key, though, is that they are saving money, until recently a very rare behavior in our country.
According to the Wall Street Journal (subscription required) in 2005, Americans were saving .4% of their income. An expert it consulted says that, when stimulus money is removed from the totals, we still are only putting .9% of our income in the bank.
If this program successfully inspires people to save by offering them a chance to win a prize, I'd suggest next allowing S&Ls to install slot machines in their lobbies. Customers could make their deposit, one coin at a time, which would flow from the machine right into their accounts. By gathering a tiny percentage of the interest on its customer's accounts, the S&L could afford to pay out a jackpot on that rare occasion that the fruits line up.
Now that's an ATM I'd enjoy.