Saving for a chance to win.

• Author: Morton, Heather
• Position: TRENDS & TRANSITIONS

National savings rates have been creeping higher--from below zero in 2005 up to 5 percent in July 2011--with more consumers saving as rainy days continue. Money managers recommend consumers have at least three to six months of mandatory expenses saved in case of an emergency.

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To encourage people to save, a few financial institutions have been offering prizes with savings programs to test whether a chance to win will motivate consumers.

Eight Michigan credit unions, the Doorways to Dreams Fund, the Filene Research Institute and the Michigan Credit Union League began a program called Save to Win. In 2009, account holders could earn chances to win cash prizes by making monthly deposits of at least $25 into a one-year federally insured share certificate, similar to a certificate of deposit. Prizes included a $100,000 jackpot, and smaller monthly cash prizes, in addition to the interest or dividend payments on the savings certificate. Over the course of 11 months, about 11,500 Michigan residents saved more than $8.5 million. In 2010, the program expanded to 19 credit unions, and it continues to grow. Michigan was chosen to pilot the Save to Win program because its law already allowed credit unions to hold promotional savings raffles.

The idea is spreading. Since 2009, lawmakers in six states Maine, Maryland...