Saving money isn’t always exciting especially when interest rates are low and progress feels slow. Prize-linked savings accounts (often called PLSAs) try to change that by mixing saving with the thrill of a potential cash prize.
Instead of earning only interest, these accounts give you chances to win money simply by adding funds to your savings. You never risk your deposit, but you get the excitement of a raffle-style reward.
The Basics, Explained Simply
A prize-linked savings account is a savings product such as a regular savings account, certificate of deposit (CD), or savings bond that enters you into cash prize drawings when you make deposits.
Here’s the key idea:
Every time you save, you get a chance to win.
Your money stays in the account, continues to earn a small amount of interest, and may also earn you entries into drawings for prizes ranging from small cash awards to larger jackpots.
These accounts are mainly offered by credit unions, though some banks are allowed to provide them depending on state law.
Why Prize-Linked Savings Accounts Exist
Many Americans struggle to save consistently. At the same time, lottery spending remains incredibly high every year. Prize-linked savings accounts were created to bridge that gap encouraging people to save by offering the excitement of winning, without the financial risk of gambling.
Instead of buying a lottery ticket and losing the money, you put funds into savings and keep every dollar even if you don’t win.
How Prize-Linked Savings Accounts Work
While details vary by program, most prize-linked savings accounts follow a similar structure:
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You open an account at a participating bank or credit union.
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You make qualifying deposits, often in set amounts like $25.
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Each deposit earns entries into prize drawings the more you save, the more chances you get.
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Winners are selected regularly, such as monthly, quarterly, or annually.
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You keep your savings and interest, whether you win or not.
If you do win, the prize money is yours but like other winnings, it’s usually subject to federal and state taxes.
Are Prize-Linked Savings Accounts Safe?
Yes. These accounts are designed to be low-risk.
Your deposits are not gambled or spent. They remain in the account and are typically protected by federal deposit insurance (NCUA for credit unions or FDIC for banks), just like a standard savings account.
The “prize” portion comes from promotional funds set aside by the financial institution not from your balance.
Popular Types of Prize-Linked Savings Programs
If you live in a state that allows prize-linked savings, you may find programs like these:
Save to Win
Offered by many credit unions nationwide, this program rewards every $25 deposit with a prize entry, up to a monthly limit. Prizes range from small monthly rewards to larger quarterly payouts.
Lucky Savers
Available in New York, this program gives you entries when your savings balance increases from one month to the next. Drawings are held monthly and quarterly.
WINCentive
This multi-state program lets savers earn entries for each $25 saved, with prizes awarded throughout the year, including annual grand prizes.
Availability depends on where you live, so it’s best to check with local credit unions.
Advantages of Prize-Linked Savings Accounts
They make saving more motivating
For people who struggle to save, the chance to win can be a powerful incentive. Even small deposits feel rewarding when they come with excitement.
You could win real money
Some savers receive cash prizes that help cover everyday expenses like groceries, utility bills, or emergency costs.
No downside risk
Unlike the lottery, you don’t lose money. Your savings stay intact and continue earning interest, even if you never win a prize.
Downsides to Consider
Very low interest rates
Most prize-linked savings accounts pay minimal interest. If you never win, your savings may grow more slowly than in a high-yield savings account.
Prizes aren’t predictable
You can’t count on winnings as income. Unlike interest, prize payouts are random, which makes budgeting difficult.
Not ideal for long-term growth
Because of the low interest, these accounts aren’t the best choice for long-term goals like retirement or major purchases. Some savers may delay moving to higher-yield accounts because they enjoy the prize aspect.
Who Should Consider a Prize-Linked Savings Account?
Prize-linked savings accounts can be a good fit if you:
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Are new to saving
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Have trouble saving consistently
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Prefer low-risk options
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Enjoy lottery-style rewards but don’t want to gamble
They work best as a starter savings tool, not as a replacement for traditional or high-yield savings accounts.
The Bottom Line
Prize-linked savings accounts turn saving money into a more engaging experience by offering cash prizes without risking your balance. While they won’t make you rich and don’t pay much interest, they can help build better savings habits especially for beginners.
Think of them as a stepping stone: a fun way to start saving today, while you build toward more traditional savings options in the future.
