Prize-linked savings (PLS) products are improving financial confidence and self-efficacy. Previous D2D research has provided evidence on the impact of prized-linked solutions on helping financially vulnerable consumers try savings products and build reserves. New research shows that consumers are building financial confidence and improving their financial decision-making across products and improving their overall financial health. Users of PLS products attribute this change to their access and continued use of their prize-linked savings accounts.
While many people know why they should save and have the desire to do so, getting started proves to be a problem. More engaging products can help to build the needed motivation.
Suggesting an exact amount to save with a reason for doing so, rather than just suggesting that people save in general, may provide a better framework for behavior change.
By penalizing withdrawals, account holders are more likely to leave the money alone and allow it to grow over time.
While lack of money to save is one barrier, a lack of knowledge about savings products and how to save is another that requires consideration.
Most Save to Win account holders regularly deposit $25, the amount needed to gain an entry in the prize drawing.
Some account holders had never had a Certificate of Deposit, or even knew what they were, and many found it to be a perfect savings vehicle due to penalizing withdrawals.