Unique Credit Union Savings Plan Helps Consumers Build Emergency Funds
Monday, July 25, 2016
Minnesota Credit Union Network - ST. PAUL, Minn. (July 25, 2016) - A new initiative by Minnesota’s credit union’s is proving to help Minnesotans save more funds for a rainy day, something that is bucking the trend of national savings rates. National surveys and statistics continue to highlight dismal savings rates. However, since January Minnesotans have opened over 3,200 accounts and saved over $1.55 million in the new WINcentive Savings accounts offered by Minnesota’s Credit Unions.
WINcentive Savings is the first prize-linked savings account to launch in Minnesota since legislators passed a new law last year allowing financial institutions to incentivize consumers to save by offering risk-free rewards. WINcentive prizes are offered on a monthly, quarterly and annual basis - up to $5,000. Account holders can qualify for up to 4 chances per month for each $25.00 increase in their savings balance. The Statewide prize-pool, facilitated by the Minnesota Credit Union Network, has awarded 311 total prizes equaling $41,000 in the first 6 months of the program.
Key findings from a survey* of WINcentive Savings accountholders show:
- 51% of respondents meet the basic definition of financial vulnerability. Basic Financial Vulnerability is characterized by having one or more of the following characteristics: low or middle income, no regular savings, or few liquid assets.
- 82% of respondents meet the expanded definition of financial vulnerability. This category describes consumers with one or more of the following: low-middle income, no regular savings, few liquid assets, high debt, and insufficient emergency savings. 82% of survey respondents have meet the definition through at least one of these categories.
- 54% of respondents have high debt. While most respondents have middle or high income, 54% have debt above $10,000, and 32% have between $1 and $10,000 in debt. Only 14% of respondents are currently debt-free.
- 49% of all respondents don’t have emergency savings to cover 3 months of expenses.
These findings in Minnesota are not unlike national trends. According to Bankrate’s Financial Security Index Survey, nearly half of Americans don't have enough set aside to cover 3 months' worth of expenses, and 28% have no emergency savings at all.
“The good news is WINcentive is attracting so many consumers to their first ever committed saving product. It’s a new way for consumers to save money, and at no risk, be eligible for cash prizes when they save,” said Andrea Molnau, Director of Communications for the Minnesota Credit Union Network. “WINcentive is a risk-free way to build a rainy day account while helping make saving approachable and fun.”
More information about WINcentive Savings, including a list of participating credit unions, can be found at wincentivesavings.org.
*The data in this report was provided by Doorways to Dreams (D2D) Fund, based on a survey administered to WINcentive account holders by their credit unions. Survey responses were collected from January through June, 2016.
The Minnesota Credit Union Network is the statewide trade association that works to ensure the success, growth and vitality of Minnesota credit unions. With nearly $20 billion in assets, Minnesota credit unions are local, trusted financial cooperatives that serve more than 1.6 million members at almost 400 branch locations around the state. As not-for-profit institutions, credit unions give back to the communities they serve. For more information, visit www.mncun.org.