Del. joins states allowing prize-linked savings accounts

May 2, 2017

Lili Zheng,

As if saving money wasn't already a good idea, now it can help you win a prize.

Delaware Governor John Carney is signed House Bill 31 authorizing the use of "prize-linked" savings accounts to promote financial frugality, especially among people with low incomes and first-time savers.

Under the bill being signed Tuesday, Delaware became the 15th state to offer program prize-linked programs.

House Bill 31 was sponsored by District 10 Representative Sean Matthews and District 11 Senator Bryan Townsend, along with District 3 Representative Helene Keeley and District 5 Senator Cathy Cloutier.

Under the legislation, savers will start out with a small deposit into a savings account. Each time they add to it, their chances to win one of many cash prizes increases.

"House Bill 31 offers a unique way to encourage Delawareans to increase their savings and to do it on a regular basis," says Governor Carney. "Without a sufficient savings emergency fund, many Delawareans across all income levels come up, on average, $1,800 short when faced with a large, unexpected expense. A prize-linked savings program is a great way to save and possibly get rewarded with a cash prize for doing so."

At the end of 2014, federal legislation was passed allowing federally charted banks and credit unions to offer prize-linked savings account if a state does not prohibit it.

This bill explicitly authorizes such programs in Delaware and clarifies that such programs do not constitute prohibited gambling or lottery practices.