One bank in the countryside of Virginia is giving customers a whole new reason to save their pennies: they could become winners.
Save and win
It all started when Brian Plum, the president of Blue Ridge Bank, had an idea. He knew that people love to gamble and wanted to give customers the chance to get their thrills without having to spend a dime.
Until recently, regulations prohibited banks from offering any sort of lottery or other chance-based incentive. But when President Barack Obama signed the American Savings Promotion Act into law in December 2014, a new opportunity arose.
But so far, only this little bank in Luray, Virginia is taking advantage of it.
Plum’s course of action? To create the USA’s first ever “jackpot savings account”. All customers with a jackpot account can get one entry into a drawing for every $25 they deposit. Blue Ridge Bank randomly selects one $200 winner and four $50 winners each month. Then, at the end of each year, one very lucky customer wins the jackpot of $5,000.
Compared to just earning interest, this setup really is an entirely different animal
Compared to earning interest, this setup really is an entirely different animal. “It takes a little longer to grasp the concept,” Plum said in a Bloomberg interview. “It’s a really different product from anything else out there.”
Nonetheless, Plum’s idea is making an impact. Nearly 100 customers in his small town have opened a jackpot savings account, and Blue Ridge Bank is seeing customers stash away more of their hard-earned cash thanks to the new product.
Barriers to lottery-style savings nationwide
With the American Savings Promotion Act now over a year old, it’s hard not to wonder why the big banks haven’t picked up on the idea already.
According to D2D Fund, a low-income advocacy group in favor of banking promotions, the reasons are twofold. First, there is still the issue of state regulations despite the fact that games of chance are now permitted on the federal level. Second, many of the banks simply aren’t aware of the possibility. That’s because it’s groups like D2D Fund and other interests doing the lobbying, not the banks themselves.
However, this appears to be changing. Brian Plum is getting calls from other states who are showing interest in his jackpot savings account products, and Illinois, Minnesota, and Oregon have followed Virginia’s lead in permitting them. According to Timothy Flacke, the executive director of D2D Fund, it’s just a matter of time.
Taking it to the web?
It will be interesting to see how and when games of chance become an integral part of the American banking experience over the next year or two. And if the practice becomes commonplace, how will banks be able to set themselves apart?
One very real possibility is the usage of online casino games. Most banks have made their e-banking a top priority. It’s not hard to imagine customers being able to log in and “gamble” with online entries they earn from their deposits. And if demand grows large enough, it might just open up a new market for casino games.