Saving money is no gamble.

• Author: Morton, Heather
• Position: TRENDS

Carolann Broekhuizen won big in 2013, collecting $10,000 on a "bet" she placed--not at a casino, but in the form of deposits at her local credit union. The Michigan woman earned that extra return on her investments in a prize-linked savings account called "Save to Win."

Save to Win has awarded more than $1.4 million in prizes to more than 14,000 members in four states since 2009. Prize-linked accounts offer a lottery-like feature to encourage people to save money. Investor options might be savings accounts or certificates of deposit, but both are held in a financial institution risk-free, just like traditional accounts. The difference is that participants are entered into a drawing based on the number or size of their deposits during a given time period. The prizes are funded through the interest that accrues across the pool of the account.

For many Americans, setting money aside can be difficult. The personal savings rate in the U.S. sat at 4.9 percent of disposable income last year compared with a high of 17 percent in 1975. In a 2014 survey by the Employee Benefit Research Institute, 36 percent of U.S. workers reported having less than $1,000 in savings or investments. Many still place their hope in the lottery. According to the Consumer Federation of America, in 2010, 38 percent of people earning less that $25,000 a year think the lottery is the most practical way to accumulate a few hundred thousand dollars during a lifetime.

When Michigan launched the Save to Win pilot project in 2008, it was the only state authorizing credit unions to hold savings promotion raffles. Banks and other financial institutions were prohibited by federal law from operating lotteries. At the end of the project's first phase, 11,666 new accounts had been opened.

Proponents argue that prize-linked accounts offer an...