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What are the advantages of prize-linked savings accounts over regular savings accounts?

Personal Finance & Money Asked on July 27, 2021

I was looking at prize-linked savings accounts (lottery-linked savings accounts), and I wonder: is there any fundamental benefit in putting my savings in such accounts instead of regular savings accounts?

I can only think of disadvantages: unpredictable and irregular interest payments, and excitement which fuels the gambling instinct.

One Answer

The expected value is not any better than traditional savings account. Might actually be slightly less. But the people who would put money in a traditional savings account aren't the target market for this product. They are trying to attract people who might otherwise spend the money. I.e. Try to convince people to save who normally would not.

Correct answer by Daniel K on July 27, 2021

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