Do you miss the Mega Millions madness? Try the party prize savings. Here’s how they work

Missing the thrill of potentially winning the nearly $1.34 billion Mega Millions jackpot? Price-linked savings accounts may well be the ticket.

Price-linked savings accounts work like traditional savings accounts that pay a fixed rate of interest on the money you deposit into your account. The difference is that these accounts also allow consumers to earn entries into raffles for prizes, including cash ranging from less than a dollar to millions, simply by saving. Generally, the more you save, the more likely you are to win.

This is what makes these accounts feel like a lottery, but you can’t lose. If you don’t win the lottery, you have often lost all the money you paid for the lottery tickets. Here you pay nothing for the chance to win a prize so there is nothing to lose.

These have been around for years, but have multiplied.

“These savings accounts not only have an element of fun attached to them, but more importantly, they encourage saving,” said Josh Roberts, Wisconsin Credit’s vice president of collaboration and system development. Union League, a nonprofit organization that supports credit unions in Wisconsin, including Saver’s Sweepstakes savings programs for their members.

Are price-linked savings accounts legal?

Yes. The American Savings Promotion Act of 2014 removed federal barriers that prohibited financial institutions from offering premium-linked savings programs.

Price-linked savings accounts are now available in 34 states. Since Wisconsin Credit Unions launched them in 2018, the total amount saved has grown to more than $31 million, spread across 14,290 accounts, Roberts said. The average balance is $2,174 and the median is $198, he said.

Walmart is also giving people a chance each month to win one of 1,000 cash rewards in its prize giveaway contest. Account holders can enter by transferring money from a Walmart MoneyCard account to a MoneyCard savings account or anyone can request an entry by mail.

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Are premium-linked savings accounts insured?

Yes, the accounts are fully government guaranteed. Up to $250,000 is insured by Federal Deposit Insurance Corp or National Credit Union Share Insurance Fund, depending on the type of institution that holds your money.

Do people really win the big prizes?


Adam Moelis, co-founder and chief executive of online and mobile savings app Yotta, estimates that someone wins their $40,000 prize “every few months or so”. The odds are around 1 in 100 million per ticket, and most people get more than one ticket each week, he said. Yotta has over 500,000 accounts and there are no fees with an account balance over $5, he said.

Crystal Doyley, an emergency medical technician from Long Island, New York, is living proof of that. Last year, when the economy started to look shaky, she said she took to YouTube’s financial channels to learn about savings accounts that could help her earn more.

She saw a video about price savings with Yotta. Not only were the savings accounts there paying an interest rate of 0.2%, higher than the national average of 0.1%, according to the FDIC, but every $25 she deposited would get her a ticket to the weekly raffle. So she signed up last October.

“I thought there was no way I was going to win,” Doyley said. “I was just hoping to make about $10.”

The following month, she won a Tesla Model 3 or the cash value. She took the money, which was $37,990 before taxes.

Each program differs in prizes and reward amounts, drawings, and ticket limits per drawing. Read the program details carefully.

Are winnings taxed?

Yes, you’ll get a 1099-INT and 1099-MISC for anything over $600 for your prize account winnings and report the prize on your tax returns, Roberts said.

This compares to lotteries, like Mega Millions, which issue Form W-2G to be reported as gambling winnings.

However, raffles and lottery winnings are taxed as ordinary income.

Who are these accounts for?

These accounts can entice people who can’t save a lot or aren’t big savers.

Three-quarters of Saver contest holders are financially vulnerable, meaning they have a low to middle income with no regular savings or few liquid assets, and 84% also have high debt or insufficient emergency funds. Roberts said..

In Wisconsin, minors can also have an account with someone who is at least 18 years old as a joint account holder, with the permission of a parent or guardian, or in a custodial account .

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“What’s problematic with the lottery is that people lose a ton of money,” Moelis said. “Here you don’t lose money but you still dream of winning $10 million.”

Ten million dollars is Yotta’s top prize, which Moelis says people have a 1 in 8 billion chance of winning. The recent $1.34 billion Mega Millions jackpot had odds of around 1 in 303 million.

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at and sign up for our free Daily Money newsletter for personal finance tips and business news Monday through Friday mornings.

This article originally appeared on USA TODAY: Miss the Mega Millions jackpot? Try price-linked savings accounts.

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