Tools for saving: Using prepaid accounts to set aside funds
Author: Cheryl Cooper, David Sieminski, David Zimmerman, Melissa Knoll
Topic: Financial literacy
Publisher: CFPB - Consumer Financial Protection Bureau
Location: United States
Format: Report
Content Type: Research
Publication Date: September 29, 2016
We present the results of a large field study exploring consumers’ use of the Reserve “set aside” feature on the American Express (the company) Serve prepaid card. The study aimed to address two key questions: 1) Can certain strategies encourage consumer saving behavior; and 2) Is saving behavior associated with better outcomes for consumers, particularly for low-income and underserved consumers? Results from the pilot indicate that, in particular, offering customers a $10 incentive for using the savings feature during a 12-week period was highly effective at encouraging enrollment in the savings feature. Non-zero balances remained relatively constant through the remainder of the year, suggesting that for consumers still using the savings feature, balances generally did not decrease even after the treatment period ended.
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