Drawn in by the chance at a $100,000 prize, members of several Michigan credit unions are saving instead of spending thanks to a new "Save to Win" program that promises (and for some, delivers) a chance at free money.
According to The Wall Street Journal, Peter Tufano, a finance professor from Harvard Business School created the program in the hopes of playing off of a basic principle in behavioral science: most people overestimate how lucky they are.
Save to Win is simple: Members of the Michigan credit unions can invest $25 or more into a special one-year CD that is guaranteed by the National Credit Union Administration and returns between 1% and 1.5% annual interest. This act of saving enters each member into a drawing for a monthly prize of $400 and a grand prize of $100,000 annually.
The contest also offers two $100, three $50, two $25 and one $15 prize awarded randomly each month.
Participants can make as many as 10 deposits of $25 or more a month, each giving them an extra "ticket" for the raffle draw. This means that each participant has the opportunity to earn a total of 120 entries a year for the grand prize draw that is scheduled for January 15, 2010.
Since the program began 25 weeks ago, there have been about $3.1 million in new deposits at the eight participating credit unions.
One drawback: For those out-of-staters hoping to invest, you're out of luck; the program requires a Michigan residency.
For more information on the program's rules and a list of participating credit unions, visit the program's Web site.
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