Prize Draw Accounts – Are they worth the gamble?

If you love a flutter, prize draw accounts could be for you. They allow you to save as well as be in to win monthly prizes ranging from $100 to a Jeep Cherokee. These accounts appeal to people with a gambling mentality and providing you don’t deposit your life savings in them, are a way to dream of winning while you save.

The fine print

Every account has different conditions and it’s essential to know what they are or you could be left out of the draw without knowing.

You also need to be aware that the prizes can change. For example, the ASB gives away a main prize of a Mini Cooper car every month, but the runner up prizes can differ. That bank, for example offers runner-up prizes that range from BBQs to cookbooks and the number of runner-up prizes can range from 10 to 100, affecting your chances of winning month by month.

Unlike Lotto, it’s impossible to know how many chances you have to win. It’s dependent on how much money in total is deposited in that account.

Low interest rates

The big sting in the tail of almost all of these accounts is that the interest rates are often very low, so you’re paying a price for your gambling. The TSB Bank pays no interest at all on its prize account. At the other end of the scale, you can get a bonus rate from ANZ that bumps the interest up to 3.25% per annum providing you deposit at least $10 a month and don’t make any withdrawals.

Beware of the fees

It’s also essential to check and compare the account fees before diving in to a prize draw account. If you’re unable to avoid fees because of the way you use your account, it might be cheaper to get an account more suited to your needs, then buy a lotto ticket or buy a small number of Bonus Bonds.

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