What is Prize-Linked Savings?
Prize-Linked Savings (PLS) is a mechanism designed to encourage people to save money. A Prize-Linked Savings account rewards individuals for making, maintaining, and growing deposits over time with cash and other prizes.
The median savings in America is only $3,000 (NRI, 2016), and 40% of Americans have no savings. There have been many efforts to correct this (education, programs, etc), but nothing seems to work. Compare these two meagre stats with another two: In 2014, Americans spent $78 billion on state lotteries — and 57% of Americans play the lottery with an average annual spend of $584 per person. People seldom realize financial value by playing the lotto, but Prize-Linked Savings harnesses the hope and thrill of lotto and converts it into helping to grow a savings account.
Prized-Linked Savings has been prevalent outside the United States — from the United Kingdom to Thailand — and has already helped millions of people save billions of dollars. In 2014, the American Savings Promotion Act was passed, paving the way for Prize-Linked Savings in the United States.
Prize-Linked Savings is poised to help the nearly 50% of Americans with little-to-no savings begin to save money.