Prize-Linked Savings and Gamified Saving: Do They Work?

When the British government launched Premium Bonds in November 1956, it sold them as savings with a thrill. Instead of paying interest, the bonds entered savers into a prize draw, and the money they put in stayed theirs. Similar products, some far older than Premium Bonds, are offered by banks, credit unions and governments in many countries.¹ Seven decades on, the UK scheme is still running.²

Prize linked savings accounts work the same way: your deposits are not staked on the draw, and the interest the pool of savers would have earned is paid out as prizes by random draw. The best evidence, a randomized trial at bank branches in Mexico, shows they attract new savers. Whether they raise saving overall is less certain, and you usually give up some return. Anyone weighing one should set its typical prize payout against an ordinary savings rate, and find out who holds the money before depositing.

Prize draws are one of several tricks in the psychology of money and saving, and the rest of this page weighs what they, and the game features in savings apps, do for savers and what they cost.

Prefer to watch? The video covers the same ground as this article.

VideoPrize‑Linked Savings and Gamified Saving: Do They Work?WiserHours

What is a prize linked savings account?

A prize linked savings account is a savings account in which your chance of winning a cash prize rises with your balance, while the balance itself is never staked on the draw. Economists Melissa Kearney, Peter Tufano and colleagues described these products in a 2010 review: instead of paying ordinary interest to everyone in proportion to their balance, they pay sizeable sums to a few savers through a lottery-like draw.¹

Why would anyone accept that swap? The 2010 review points to two pulls: a small chance of becoming rich, and an element of fun. It argues that the popularity of state lotteries among low- and middle-income US families hints at demand for a savings version.¹ Picture two savers each putting away a modest sum every month. One earns a few coins in interest that nobody notices. The other gets a monthly draw to check, and now and then a prize.

So weigh one of these accounts as a savings account with a game bolted on. What matters is whether the game helps you keep putting money in.

How Premium Bonds, Save to Win and similar schemes work

UK Premium Bonds, sold by the Treasury-backed savings provider NS&I, pay no interest. An annual prize fund rate pays for a monthly draw with tax-free prizes from £25 to £1 million, and every £1 Bond has the same odds.² You can cash in all or part at any time.

In the US, prize linked savings needed a change in the law, because state lottery laws barred private lotteries.¹ The federal American Savings Promotion Act of 2014 allowed “savings promotion raffles,” in which the only price of entry is a deposit, and Commonwealth, a US non-profit that campaigns for these accounts, counted 34 states with their own enabling measures when we checked in October 2026.³ The best-known product is Save to Win, which began at Michigan credit unions in 2009.⁴

The details vary more than the idea. Some schemes add a little interest on top, and prize sizes and entry rules differ from one to the next.⁴ Before you compare one with another account, read three things: what the prizes are funded from, how easily you can withdraw, and how your deposit is protected.

Do prize linked savings accounts make people save more?

Prize linked savings reliably attract savers, but whether they create new saving depends on the setting. In a randomized trial across 110 bank branches in Mexico, a two-month prize draw drew more new accounts, nearly all from people who had no bank account, and the flow of deposits stayed higher for about three years. Other studies found smaller or unclear effects.

The study

Moderate evidence

Prize draws at a Mexican savings bank, 2010

Economists Paul Gertler, Sean Higgins, Aisling Scott and Enrique Seira worked with Bansefi, a Mexican government savings bank for low-income households, and picked 40 of 110 branches at random to run a two-month prize draw, with one entry for every 50 pesos of new savings. Treated branches opened more accounts and took more deposits during the draw. About 96% of the new account holders had not banked anywhere before, and the extra flow of deposits lasted roughly three years after the prizes stopped. The results come from a working paper that journals have not yet reviewed.⁵

The result matters because the design rules out the usual worry that only keen savers sign up: whole branches were assigned at random. Its caveat is that account openings dropped back as soon as the draw ended, so the prize got people through the door rather than changing everyone’s habits.⁵

The earlier South African case points the same way. First National Bank’s Million-a-Month Account opened more than a million accounts between 2005 and 2008, until the national lottery board sued to have it closed as an illegal lottery.¹ Using that bank’s records, Shawn Cole, Benjamin Iverson and Peter Tufano estimated in 2022 that people who chose the account increased their total savings by about 1 percent of annual income on average, and used random prize wins to show it replaced some lottery gambling.⁶ Those savers chose the product, so the savings figure describes the people drawn to it.

A laboratory experimentlaboratory experiment: An experiment run under conditions the researchers set up and control, often with students doing short tasks. Control makes cause and effect easier to pin down, but the tasks are simpler than real life, so results do not always carry over to work or home.Full entry in the glossary with 96 University of Maryland students found the same pull in a controlled setting: more of them chose to wait for a later payment when the reward came as a prize draw than as a fixed amount of the same average value.⁷ The appeal was strongest among men, lottery players and students with low bank balances.

Then come the weaker results. In a 2019 randomized controlled trialrandomized controlled trial: A study that assigns participants to the treatment or the comparison group at random, so the groups start out alike and a difference in what happens next can be put down to the treatment. Random assignment makes the two groups comparable; it does not make the people in the trial representative of anyone else.Full entry in the glossary among 300 men in Siaya County, Kenya, weekly lottery rewards did not clearly beat ordinary interest over about nine weeks: somewhat more men in the prize group saved anything, but the difference could have been chance.⁸ In the US, the Pew Charitable Trusts found in 2018 that only about 1.3 percent of members at a typical Michigan credit union offering Save to Win opened an account, and that the data could not show whether savers would have put the money aside anyway.⁴

So treat a prize draw as a starter motor. If you already save steadily, the draw probably adds excitement more than saving.

Are prize linked savings accounts worth it?

Prize linked savings are worth it mainly if the draw gets you to save money you would otherwise spend, because you trade a known return for an uncertain one that is often lower. The 2010 review notes that the Premium Bond prize rate has generally been lower than the rate on comparable UK government bonds.¹

The quoted rate also flatters a typical saver. The prize fund rate is an average, and a few large prizes pull it up. MoneySavingExpert, a UK consumer guide, calculates that with average luck most holders win less than the prize rate, and that someone holding £1,000 would typically win nothing in a year. These are UK figures that change whenever NS&I changes the rate.⁹

1. Your deposit stays yours: in both rows the savings themselves are not at stake; only the return is shared out differently
2. Interest becomes a prize fund: instead of a small payment to everyone, the return is pooled and paid as prizes by draw, and more savings means more chances
3. Most savers get less than the average: a few large prizes pull the average up, so with ordinary luck a saver receives less than the quoted rate, and some months nothing

On £10,000 in Premium Bonds, a prize fund rate of 4.35 percent implies about £435 a year on average across all holders. MoneySavingExpert’s estimate for typical luck on that sum, on its October 2026 figures, is about £350, or roughly 3.5 percent; some years you would get more, some much less.⁹ An ordinary account paying a fixed rate gives you its number every year, so compare that number with the typical prize figure, not the average. If neither return beats rising prices, both lose buying power, which NS&I itself warns about.² Taxes can tilt the sums, since UK Premium Bond prizes are tax-free, so compare after tax where you live.

Myth

A prize account pays the same as ordinary interest, just in lumps.

Fact

It pays the same on average across all savers. With typical luck, most individual savers get less than the quoted rate.

A prize account suits money where certainty matters less than the habit, such as a small amount you would otherwise drift into spending. It suits money you must be able to count on less well. For the cushion you lean on in a crisis, our guide to how much to hold in an emergency fund, and where covers what that money has to do.

Is prize linked savings gambling?

Prize linked savings is not gambling in the usual legal sense, because you do not pay to enter: your deposit buys the chances and stays yours. US law, as Kearney and colleagues explain, treats something as a lottery when it combines a prize, chance and payment, which is why American schemes needed laws defining the deposit as the only requirement.¹ Lottery regulators can still object, as South Africa’s case showed.

Psychologically, it borrows from gambling on purpose. The evidence so far suggests it can steer lottery money toward saving rather than feed more gambling: the South African study found the account substituted for lottery play.⁶ In Kenya, the trial found no clear change in gambling spending either way.⁸

For someone who already buys lottery tickets, a prize account offers a similar thrill without spending the stake. If chasing prizes of any kind is starting to feel hard to control, that is a reason to step back rather than add another draw, and free, confidential help exists. A doctor or a local gambling support service is a starting point anywhere. In the UK, the NHS lists the National Gambling Helpline, run by GamCare, on 0808 8020 133, open at any hour.¹⁰ In the US, the National Council on Problem Gambling runs the National Problem Gambling Helpline, 1-800-MY-RESET, by call, text or chat at any hour.¹¹

Do savings apps with games help you save more?

Savings apps with badges, streaks, leaderboards and round-ups are popular, but independent tests of them are rare and small. The clearest one, a four-week UK field experiment by Nethal Hashim, Irene Scopelliti and Janina Steinmetz at City, University of London, randomly gave 331 adults either a gamified or a plain savings tracker.¹²

People using the gamified version, with badges and a leaderboard, logged a higher share of their saving goal. But the difference was clear only after the researchers excluded one extreme result, a step not planned in advance; on the full sample it was not. Savings were logged by the participants themselves, and the work is a technical report, not a peer-reviewed paper.¹² We found no published, independent randomized test of round-up features or streak counters on how much people save.

In practice, a game layer might help some people stick with a goal for a few weeks, but the evidence is thin. The bigger risk is the plumbing behind the game. America’s deposit insurer, the Federal Deposit Insurance Corporation, warns that nonbank app companies are never FDIC-insured themselves, and that deposit insurance does not cover the failure of the app company.¹³ Customers of Yotta, a US app that paid sweepstakes-style rewards instead of interest, were caught up when its middleware partner Synapse collapsed, a failure that left about $200 million of customer money frozen.¹⁴

For more on keeping spending urges in check while you build savings, see tactics for impulse buying that hold up in studies.

Checks before you choose a prize or game account

Prize and game accounts are a personal choice that depends on your income, your other savings, your taxes and how you feel about uncertainty, so treat the checks below as general questions, not advice.

Before you open a prize or game savings account

• Find out who legally holds your money and how it is protected
• Check how prizes are funded and how often draws happen
• Read the withdrawal rules and any notice period or penalty
• Compare the typical return, rather than only the quoted average, with an ordinary account
• Keep the money you rely on in an emergency somewhere predictable

For a personal decision, a regulated, fee-only financial adviser can look at your whole situation, and free guidance also exists. In the UK, the government’s Money and Pensions Service, which runs MoneyHelper, offers free and impartial money guidance.¹⁵ For US readers, most credit counselors belong to non-profit organizations and can help you plan a budget and manage money, a Consumer Financial Protection Bureau guide explains.¹⁶ Elsewhere, check your own financial regulator or a government-backed advice service, and confirm that any scheme is legal and protected in your country.

The bottom line

The strongest trial shows a prize draw brings people into saving, but it does not reliably make existing savers save more, and with typical luck most earn less than the quoted rate. A prize or game account fits money where the habit matters more than the last bit of return. Before depositing, check who holds the money and how it is protected.