The Lottery Ticket Opportunity Where You'll Never Lose Money Again, Ever

Yes, you can now buy a lottery ticket that you never lose money on. Just walk into a credit union and open a savings account. The teller then sells you lottery tickets to put you into a draw for some big prizes.

Looks just like a lottery win, but it's not. Joseph J won $10,000 in his Michigan Credit Union League's Save To Win lottery. Photo: MCUL

They're called prize-linked savings accounts, and it gives residents a little extra incentive to put money away for a rainy day.

Prize-linked savings accounts might seem like an innovative concept, fresh off the desk of some ground-breaking personal finance start-up founder, but the truth is that they started in 1694 and have been around longer than the United States itself.

Even churches are getting into the act. Photo: The Financial Brand

A 2002 survey showed these kind of prize-linked savings and investment instruments were available in Spain, Germany, Sweden, Japan, Mexico, the United Kingdom, Kenya, Pakistan, Argentina and other nations at various times since 1990.

Prize-linked savings in the U.S.
The first of the modern stateside savings lotteries hit the personal finance market in 2009. A group of eight Michigan credit unions launched the 'Save to Win' program. Members opened a 12-month share certificate at a participating credit union and could earn an entry in a monthly drawing with every $25 they deposited.

The program showed strong results, and soon other states began changing gambling and credit union regulations to make room for similar programs.

As of 2013, six additional states -- Maine, Maryland, Rhode Island, North Carolina, Nebraska and Washington -- had cleared the way for lottery and raffle incentives on savings accounts.

Although the best savings account rates are typically offered by less exciting investment instruments, the experience of having money in store for emergencies can easily serve as a gateway to deeper curiosity about everyday savings.

A typical advertisement for the 'Save To Win' promotion.

Once new savers get some experience with healthy financial habits, they may be more likely to further explore the world of traditional and online savings accounts.

Admittedly, prize-linked savings accounts might rely on something of a gimmick to encourage that first step into savings, but it's not a whole lot different from the classic practice of banks giving out toasters or other deal-sweeteners to new customers.

Source: Justin Boyle