September 2016

Tools for saving: 

Using prepaid accounts to 

set aside funds

Innovation Insights
1 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

§ Cheryl Cooper

§ Melissa Knoll

§ David Sieminski

§ David Zimmerman
2 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

Executive summary

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?

To encourage consumer saving behavior, the company tested four strategies in the field to 

promote savings to prepaid customers who had not previously signed up for the savings feature. 

The strategies included: 1) encouragement to save via email; 2) encouragement to save via direct 

mail; 3) promotional incentives; and 4) encouragement to enroll in automatic transfers to the 

savings feature. 

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.

The company also surveyed a random sample of study participants nine months postintervention to learn more about a broad range of personal finance topics. Results from the 

survey showed that participants who were sent an incentive offer as part of the messaging 

reported statistically significantly less payday loan use compared to those in the control group. 

The results emerging from this pilot suggest that incentivizing prepaid card customers to save, 

and providing an opportunity for them to do so using a savings feature that keeps funds 

dedicated for saving separate from those used for spending, could provide tangible financial 

benefits. Consumers in this pilot demonstrated a willingness to take up the savings feature, 
3 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

indicating interest in alternative savings vehicles, and some customers also reported actual 

changes in their financial behavior.
4 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

Table of contents

Executive summary..................................................................................................... 1

Table of contents......................................................................................................... 4

1. Introduction........................................................................................................... 5

1.1 Background ................................................................................................7

2. Research Goals and Study Design ................................................................... 12

3. Methodology........................................................................................................ 14

3.1 Data Source.............................................................................................. 16

4. Findings............................................................................................................... 18

4.1 Savings Feature Uptake...........................................................................18

4.2 Balances in Savings Feature....................................................................21

4.3 Longer-term Treatment Effects ............................................................. 22

5. Summary ............................................................................................................. 25
5 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

1. Introduction

The Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that the Consumer 

Financial Protection Bureau (CFPB or the Bureau) work to empower consumers to make more 

informed financial decisions. As part of this mandate, the Bureau is charged with providing 

“opportunities for consumers to access . . . savings, borrowing, and other services found at 

mainstream financial institutions.”

1 To further this mandate, the CFPB is committed to engaging 

in research to identify effective tools and strategies that can help consumers better manage their 

money and plan for their futures. 

Congress also directed the Bureau to exercise its statutory authorities “for the purposes of 

ensuring that . . . markets for consumer financial products and services operate transparently 

and efficiently to facilitate access and innovation.”2 To pursue this objective, the Bureau has 

created its Project Catalyst, which focuses on fostering innovation in financial services through a 

variety of novel means, including broad outreach efforts to improve understanding of how such 

innovation can improve the financial lives of consumers. Among these means is the use of pilot 

projects to encourage financial companies to experiment with new approaches that can yield 

research and data to gauge their effects upon consumers. 

 

1 Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act,	Pub.	L.	No.	111-203,	Sec.	1013(d)(2)(C).

2 Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act,	Pub.	L.	No.	111-203,	Sec.	1021(b)(5).
6 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

Encouraging savings behavior among consumers is also a focus for the CFPB. However, many 

consumers, especially those with low and moderate incomes, do not have a traditional savings 

account and may instead rely on a checking or prepaid account as both their primary 

transactional account and their savings vehicle.3 Rather than being able to separate funds 

intended for spending and saving, these consumers may have to mentally track funds allocated 

for different purposes, potentially making saving more challenging. 

American Express (the company), like several other prepaid card providers, recently developed 

a feature for their Serve prepaid card called Reserve, which allows cardholders to set aside funds 

dedicated for saving and keep them separate from funds in their main prepaid account. 

Cardholders can set aside money using this feature until they are ready to use it, at which point 

they must transfer the funds to their main transaction account using the card provider app or 

website. The company has also built in an automatic transfer feature, which allows consumers to 

schedule recurring transfers from the consumers’ transaction account to the savings feature. 

Through CFPB’s Project Catalyst initiative, the company agreed to share insights with the 

Bureau from its trial pilot program focused on encouraging saving among prepaid card users. 

The CFPB team that worked with the company to implement this trial program included Project 

Catalyst, the Office of Research, and the Office of Financial Empowerment. The CFPB launched 

a research study with the company in 2014 in order to expand our efforts to encourage saving 

and understand potential barriers to saving, especially for low and moderate income consumers. 

 

3 According	to	the	2013	FDIC	survey	of	Unbanked	and	Underbanked	Households	7.7%	of	all	households	had	no	bank	account.		

Consumers	with	lower incomes	were	far	more	likely	to	be	unbanked	with	11.4%	of	households	with	incomes	between	

$15,000	and	$30,000	and	27.7%	of	households	with	incomes	less	than	$15,000	having	no	account. The same	survey	indicated	

that	prepaid	card	use	was	more	common	among	unbanked	households	and	that	the	rate	of	growth	among	households	

without	bank	accounts	was	growing	faster	than	in	the	underbanked	or	fully	banked	segments	of	the	population.	Between	

2011	and	2013	the	proportion	of	unbanked	households	having	used	a	prepaid	card	increased	from	17.8%	to	27.1%.		Source:	

The	FDIC	2013	National	Survey	of	Unbanked	and	Underbanked	Households	

https://www.economicinclusion.gov/surveys/2013household/
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The study leverages insights from behavioral science and current work being conducted by the 

company to evaluate the effectiveness of various strategies to encourage prepaid users to set 

aside funds for future use.4

1.1 Background

Having liquid savings may be particularly important for consumers with irregular income flows 

that may not be synchronized with expenses, or when shortfalls in income or unforeseen 

expenses occur. One study found that “households without timely access to financial liquidity 

when an unexpected event occurs may experience economic and material hardships that 

threaten household well-being, including housing instability, food insecurity, or failure to access 

needed medical care.”5 Other research suggests that saving may be difficult for many 

consumers, but likely is especially challenging for those who are living “paycheck to paycheck.”6 

These consumers may have to try to keep up with known expenses while also anticipating

unexpected expenses or emergencies that may upset their financial plans. Previous research has 

shown, however, that consumers generally have difficulty accurately predicting their future 

spending and savings behavior,78 and such predictions may be even more difficult to make 

 

4 The	research	was	conducted	in	accordance	with	the	privacy	protections	outlined	in	the	Privacy	Impact	Assessment	Market	

Research	in	the	Field	v.1,	and	the	information	shared	by	the	company	with	the	CFPB	was	stripped	of	information	that	directly	

identifies	any individual. Market	Research	in	the	Field	v.1	Privacy	Impact	Assessment,	December	10,	2014	is	available	at	

http://files.consumerfinance.gov/f/201412_cfpb_market-research-in-the-field-v1.pdf. 5 J.	Michael	Collins	and	Leah	Gjertson.	 Emergency	savings	for	low-income	consumers.	2010.	

6 The	Pew	Charitable	Trusts.		The	Role	of	Emergency	Savings	in	Family	Financial	Security;	Barriers	to	Saving	and	Policy	

Opportunities “Seventy-one	percent	of	survey	respondents	face difficulty	saving	because	of	expenses	they	didn’t	plan	for,	

including	26	percent	who	say	this	happens	most months	or	just	about	every	month.”		January	2016.

7 Peetz,	J.	and	Roger	Buehler,	2009.	Is	There	a	Budget	Fallacy?	The	Role	of	Savings	Goals	in	the	Prediction	of

Personal	Spending.	Personality	and	Social	Psychology	Bulletin,	35,	1579-1591.
8 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

accurately for consumers with low and moderate incomes or for those whose income varies on a 

weekly or monthly basis. 

The Federal Reserve described in its Report on the Economic Well-Being of U.S. Households in 

2015 how a majority of American families are experiencing some form of financial stress within 

the household balance sheet: 

§ Fifty-two percent of all households (and 68% of households with incomes less than 

$40,000) report that household spending is greater than or equal to income

§ Forty-two percent of households with volatile incomes or expenses report that they 

struggled to pay bills at least once in the last year 

§ Forty-six percent of all households (and 66% of households with incomes less than 

$40,000) said a $400 expense would be a challenge to handle and that they either could 

not pay the expense or would borrow or sell something to do so. 9

With these considerations as a backdrop, many consumers with lower levels of income may not 

be saving enough to help them avoid financial emergencies. For example, the same Federal 

Reserve study found that 46 percent of households within this income bracket reported that 

they had gone without some form of medical treatment in the preceding 12 months, and 53 

percent of households making less than $40,000 a year reported saving nothing during the year. 

Among these respondents, 17 percent were unbanked.10

 

8 Peetz,	J.	and	Roger	Buehler,	2013. Different	goals,	different	predictions:	Accuracy	and	bias	in

financial	planning	for	events	and	time	periods.	Journal	of	Applied	Social	Psychology,	43,	1079-1088.

9 Board	of	Governors	of	the	Federal	Reserve	System.	Report	on	the	Economic	Well-Being	of	U.S.	Households	in	2015.	

http://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf		

10 Ibid.
9 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

Taken together, the relatively low savings balances and lower utilization of traditional savings 

accounts reported by such consumers suggests that alternative savings vehicles may afford 

consumers with a variety of benefits that may improve their overall financial situation and wellbeing. Providing opportunities to save outside of traditional savings accounts, such as on 

prepaid cards consumers may already be using, could help these consumers align their reported 

need for emergency savings with actual liquid funds when an emergency arises. 

A primary purpose for liquid savings is to smooth income

One reason to set aside funds in accounts that are relatively liquid is to provide an opportunity 

for consumers to smooth the funds available for spending in a given pay period if a shortfall in 

income occurs. When expenses exceed household income episodically, having liquid savings can 

help consumers protect savings dedicated for other purposes, like retirement or education, and

avoid costly penalties and fees associated with accessing these dedicated funds. Consumers who 

have access to and make use of traditional checking and savings accounts may have strategies 

for income smoothing that involve the transferring of funds between these accounts. In this way, 

traditional accounts may serve to help consumers better manage their income by enabling 

consumers to put money aside in separate accounts dedicated to different purposes. Without 

traditional accounts, however, consumers may have to mentally separate these funds, which 

may make sticking to a savings goal more difficult. 

Financial emergencies can have dramatic effects on households with 

little or no savings 

When an emergency occurs, asset-poor11 families are two to three times more likely to 

experience hardship than non-asset-poor families. This information holds true across income 

levels. One study found that “Overall, families with assets are 23 percentage points less likely to 

 

11 The	Corporation	for	Enterprise	Development’s	Asset	and	Opportunity	Scorecard,	2016	defines	asset	poverty	as “households	

without	sufficient	liquid	assets	to	subsist	at	the	poverty	level	for	three	months	in	the	absence	of	income.”
10 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

suffer from general deprivation than asset-poor families after experiencing a negative event; 9 

percentage points of this difference are related to income, leaving 14 percentage points related to 

asset holding.” 12

Savings may help consumers avoid costly credit and alternative financial 

services 

Having funds set aside for an emergency may provide consumers with an alternative to highcost credit products, thereby potentially improving their overall financial well-being and 

objective financial state. 

Lack of sufficient income is one obvious barrier to saving, but a lack of a convenient savings 

vehicle may be an additional barrier. Even if a consumer is highly motivated to save and is able 

to find a way to do so financially, not having a convenient, low-cost way to implement one’s 

savings strategy could derail a consumer’s intentions to save. Further, research has indicated 

that consumers who are more resource constrained may have less cognitive bandwidth to 

employ savings strategies.13 Certain approaches from psychology and behavioral economics, 

however, have shown promise for increasing savings rates, even among those with relatively 

lower incomes. For example, previous research has shown that “earmarking” and partitioning 

funds into two accounts increases savings rates among low-income consumers.14 Specifically, 

the researchers find that partitioning funds creates a “rule” in the minds of some consumers for 

the use of these funds; breaking the rule by spending earmarked funds for an unrelated purpose

 

12 McKernan,	et.	al.	“Do	Assets	Help	Families	Cope	with	Adverse	Events?”	The	Urban	Institute	(2009)	

http://www.urban.org/UploadedPDF/411994_help_family_cope.pdf

13 Shah,	A.	K.,	Sendhil	Mullainathan,	and		Eldar	Shafir,	2012.	Some	consequences	of	having	too	little.	Science,	338,	682-685.

14 Dilip	Soman	and	Amar	Cheema.		“Earmarking	and	Partitioning:	Increasing	Saving	by	Low-Income	Households.”	Journal	of	

Marketing	Research	Vol.	XLVIII	(Special	Issue	2011),	S14–S22 http://journals.ama.org/doi/abs/10.1509/jmkr.48.SPL.S14
11 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

induces feelings of guilt and reduces the likelihood that the consumer will spend the funds on an 

unrelated expense. 

The current research project, which encourages saving on a prepaid card with a feature

dedicated for a consumer to set aside funds, provides a unique opportunity to test whether 

certain interventions indeed can drive consumers to utilize this savings feature. Further, we are 

interested in learning whether providing a ready way for prepaid card users to separate or 

earmark funds can increase the rate of saving among the company’s customers and the 

“stickiness,” or persistence, of the funds once they are set aside in the savings feature. Finally, 

the project provides an opportunity to test whether encouraging savings results in better 

outcomes over time. 
12 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

2. Research Goals and Study 

Design

The study design, which was executed by the company, enabled the Bureau to explore two major 

research questions using data stripped of direct identifying personally identifiable information 

(PII) the company provided to the Bureau:

1. Can certain strategies encourage consumer savings behavior? 

2. Is savings behavior associated with better outcomes for consumers, particularly for 

consumers who are underserved and/or have low incomes?

Within these broad questions, the research goals for this project were to: 

§ Gain insight into consumer savings behavior and identify practices that promote savings 

behavior over the short and medium-term among prepaid card users.

§ Evaluate the short-term and medium-term impact of saving on consumer well-being 

among prepaid card users.
13 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

To encourage consumer savings behavior, the company tested four strategies in the field to 

promote savings to prepaid customers who had not previously signed up for the savings 

feature15: 

1. Encouragement via email – The company sent a series of emails highlighting the 

benefits of saving to a subset of prepaid customers to encourage them to set up and use the 

savings feature.

2. Encouragement via Direct mail – The company sent a refrigerator magnet 

highlighting the benefits of saving to a subset of prepaid customers to encourage them to set 

up and use the savings feature.

3. Promotional incentives – The company offered a monetary incentive to a subset of 

prepaid customers to encourage them to set up and use the savings feature.

4. Automatic Transfers – The company encouraged a subset of their prepaid customers 

to set up automatic transfers from their transaction account into the savings feature.

 

15 By	the	time	the	company	actually	deployed	the	interventions	on	January	9,	2015,	696	customers	(approximately	0.13%	of	the	

sample)	had	already	signed	up	for	the	savings	feature.
14 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

3. Methodology

Through CFPB’s Project Catalyst initiative, the company agreed to collaborate on a research 

pilot with the CFPB. The company deployed a trial pilot program from January through March 

2015 focused on encouraging saving among a subset of prepaid card users. Using data provided 

by the company, the CFPB evaluated the effectiveness of these efforts to encourage prepaid 

users to set aside funds in the savings feature on the prepaid card.16

In order for these research questions to be studied in a rigorous and statistically-meaningful 

way, the study employed a randomized controlled trial (RCT) using a sample of approximately 

540,000 prepaid card users. In short, some customers received a treatment (a condition or 

combination of conditions to encourage savings) and others did not (control group), with 

random assignment to treatment and control groups during the sample period. To determine 

whether the intervention had any effect, we looked at the differences between the treatment and 

control groups and assessed whether customer savings rates and other relevant outcomes 

 

16 The	information	shared	by	American	Express	was	stripped	of	direct	identifying	personally	identifiable	information	(PII),	and	

appropriate	precautions,	such	as	implementation	of	access	controls,	training,	and	adherence	to	privacy	and	cybersecurity	

policies	and	procedures, were	incorporated to	ensure	that	individual	consumers	cannot	be	identified	or	re-identified	through	

the	data.
15 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

differed in a systematic way. The RCT methodology allowed us to determine whether the 

observed outcomes were caused by the intervention.17

The trial pilot program employed seven different treatment groups and a control group. 

Customers in all treatment groups received email messages related to the savings feature on the 

prepaid card. Some treatments employed targeted language encouraging individuals to save 

(encouragement condition), some included an offer of $10, provided by the company, if 

individuals saved $150 by March 31st (incentive condition), and others encouraged the use of an 

automatic transfer feature (automatic transfer condition) that would automatically transfer 

funds from the transaction account to the savings feature on a periodic basis or as a single 

transfer on a specific date determined by the customer. In addition, some customers received a 

direct mailer from the company (direct mail condition) that included a free refrigerator magnet 

encouraging them to picture what they could do with the money they set aside in the savings 

feature. As shown in Table 1, some customers received a combination of the conditions, but the 

pilot did not include all possible combinations. 

Approximately 540,000 prepaid card users (including both control and treatment participants) 

were included in the trial pilot program, some of which were identified by the company as 

“active” card users (approximately 240,000 users) and others who were identified as “inactive” 

card users (approximately 300,000 users). Active user status was determined on December 5, 

2015 using the company’s standard definitions.18

 

17 For	this	research	project,	unique	identifiers	were	used	for	matching	between	datasets.	This is	covered	by	the	System	of	

Records	Notice	(SORN)	CFPB.022—Market	and	Consumer	Research	Records,

https://www.federalregister.gov/articles/2012/11/14/2012-27582/privacy-act-of-1974-as-amended.

18 A	designation	of	active	or	inactive	is	based	on	transaction	activity	in	the	previous	90	days,	where	transactions	include	funds	

coming	in,	going	out,	or	being	sent	via	person-to-person	functionality.	Active	accounts	are	those	that	had	at	least	one	

transaction	in	the	previous	90	days,	and	inactive	accounts	are	all	others.	Given	that	inactive	individuals	may	have	very	

different	relationships	with	the	prepaid card	as	compared	to	active	users,	only	a	subset	of	the	treatments	were	applied	to	

inactive	users.
16 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

TABLE 1: TREATMENT GROUPS AND INTERVENTION CONDITIONS

Encourage Incentive Automatic Direct mailer

Control

Treatment 1

Treatment 2

Treatment 3

Treatment 4

Treatment 5

Treatment 6

Treatment 7

3.1 Data Source

The company provided the CFPB with two types of data stripped of direct identifying personally 

identifiable information (PII) to evaluate the savings intervention treatments.

3.1.1 Administrative Data

The company shared data with the CFPB that it typically collects and is able to share about their 

customers, while stripping direct identifying personally identifiable information (PII) to protect 

consumer privacy. The CFPB received account-level deposit and transaction data for all of the 

individuals included in the trial pilot program who signed up for the savings feature by June 30, 

2015, about 15,700 individuals. Of the individuals who did not sign up for the savings feature by 
17 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

June 30, 2015, random samples of 2,500 were selected from each randomization set,

19 and the 

same administrative data was provided for these individuals as well. This led to a total sample 

size of about 48,000 prepaid customers for which the CFPB received data. The administrative 

data consisted of information about the individual account, including aggregated monthly data 

on spending categories from prepaid transactions, transaction-level data for funds loaded onto 

the prepaid card, and funds moved between the transaction account and the savings feature. 

Although the trial pilot program ran from January through March 2015, the administrative data 

covers the period from January 1, 2015 through December 31, 2015. This additional 

administrative data collected after the conclusion of the trial period provides an opportunity to 

explore continued customer activity within and between the transaction account and the savings

feature. 

3.1.2 Customer Survey

In December 2015, nine months after the trial period ended, the company administered a 

voluntary survey to a subset of its customers. Specifically, the survey was sent to all individuals 

who had signed up for the savings feature by June 30, 2015 and a random subsample of those 

who had not from each of the randomization sets. The company received approximately 2,800 

survey responses.20 The follow-up survey was designed to elicit information relevant to the 

study’s second primary research question: Is savings behavior associated with better outcomes 

for consumers, particularly consumers who are underserved and/or have low incomes?

 

19 A randomization set refers to a group of individuals categorized by active status and treatment group. In total the 

pilot employed 13 randomization sets, eight consisting of active individuals and five consisting of inactive 

individuals. Two of the 13 randomization sets were control sets, one for active card users and one for inactive users. 

20 This figure does not represent a true response rate, as the number of potential respondents was capped in 

accordance with the company’s budget for the survey portion of the project. 
18 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

4. Findings

4.1 Savings Feature Uptake 

First, the Bureau explored uptake of the savings feature as measured by the date that individuals 

signed up for the savings feature on the prepaid card. While the savings feature existed prior to 

the pilot study, many prepaid customers had yet to enroll in the feature when the pilot began.

21

 

21 All individuals selected to participate in the pilot had not signed up for the savings feature by December 31, 2014, 

however 696 of those selected to participate had signed up for the savings feature by the time the treatments were 

deployed on January 9, 2015. 
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FIGURE 1: ENROLLMENT IN SAVINGS FEATURE OVER TIME BY RANDOMIZATION SET

Figure 1 shows enrollment in the savings feature over time for the 11 randomization sets and the 

two control groups. There were three substantial spikes in savings feature enrollment, each 

occurring on days when trial pilot participants received the various treatment emails about 

enrolling in the savings feature. Enrollment occurring on the three email dates accounted for 

20.7 percent of all enrollments within the study sample occurring in the first six months of 2015. 

The direct mailer was sent out shortly after the first email; however, there was no corresponding 

spike in enrollment around the time when the mailers likely would have arrived. For the 

randomization sets comprised of active prepaid card users, all four sets that contained an 

incentive component showed the highest levels of enrollment in the savings feature. For the 

randomization sets comprised of inactive prepaid card users, the sets with the highest 

enrollment in the savings feature were those that a) included the combination of the incentive 

and encouragement to save via email, and b) included a combination of the incentive and 

encouragement to enroll in automatic transfers.
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Of particular interest is the relative impact the various treatments had on enrollment in the 

savings feature compared to the control group. To highlight these effects, Figure 222 shows 

enrollment in the savings feature for participants in each randomization set as a percentage of 

enrollment for the relevant control group (i.e., active or inactive).

FIGURE 2: SAVINGS FEATURE ENROLLMENT AS OF JUNE 30,2015

 

22 Enrollment is determined as of June 30, 2015. All enrollments are relative to the corresponding active or inactive 

control set. Error bars represent plus and minus two standard errors.
21 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

Again, the sets containing individuals originally categorized as active card users who were sent 

emails that included an incentive message displayed large increases in enrollment in the savings 

feature compared to the control group. For those originally categorized as active users who 

received the email message containing only the incentive offer (i.e., the incentive group in Figure 

2), this represents a 4.0 percentage point increase, or 115 percent increase, in enrollment 

compared to the control group. The next three largest increases also occurred with 

randomization sets comprised of individuals originally determined to be active card users. 

Specifically, active users who were sent a message containing the incentive offer and an 

encouragement to save via email (i.e., the incentive + encourage group in Figure 2) showed an 

increase in enrollment in the savings feature of 3.83 percentage points, or 110 percent, 

compared to the control group; active users who were sent the incentive offer and the automatic 

transfer message showed an increase in enrollment of 3.59 percentage points, or a 103 percent 

increase, relative to the control group; and finally, active card users who were sent a 

combination of the incentive offer, encouragement to save via email, and encouragement to use 

automatic transfers (i.e., the auto + incentive + encourage group in Figure 2) showed a 3.41 

percentage point, or a 98 percent, increase in enrollment compared to the control group. While 

the subset of treatments is different for those originally categorized as inactive card users, a 

pattern similar to that found with active card users emerges, but with a much smaller 

magnitude. 

4.2 Balances in Savings Feature

Table 2 shows the median maximum monthly balance in the savings feature for individuals who 

had at least some funds in the savings feature at any point during each month. As expected, 

median maximum balances in the savings feature were higher during the treatment period—

from January through March. Importantly, however, non-zero balances remained remarkably 
22 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

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.23

TABLE 2: MEDIAN MAXIMUM SAVINGS FEATURE BALANCES BY MONTH

4.3 Longer-term Treatment Effects

In order to determine whether the savings-related treatments were associated with better 

financial outcomes for consumers, we also analyzed the causal impacts of our treatments on 

other financial behaviors using the survey the company fielded in December of 2015, nine 

months after the trial pilot program ended. Specifically, one survey question asked individuals 

 

23 For context, the median of the maximum transaction account balance in June (month 6) was $264.25 for 

customers using the savings feature that month; in December (month 12), this value was $269.35.
23 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

whether they had used or engaged in any of the following products or services in the last year: a 

refund anticipation loan (RAL), a rent-to-own agreement, selling an item at a pawn shop, using 

a check cashing service, using money orders, using wire remittances, and using a payday loan or 

paycheck advance service.24 Our analysis of this survey question revealed that certain 

treatments had a robust and statistically significant impact on the likelihood of reporting use of 

payday loans.

Figure 3 shows reported payday loan use relative to control across all conditions.

25 Based on 

survey responses from a subset of the pilot population,26 an estimated 14.7 percent of individuals 

in the pilot used payday loans in the past year. Participants who were sent an incentive offer as 

part of the messaging reported statistically significantly less payday loan use compared to those 

in the control group. Specifically, based on the subset of the pilot population responding to the 

survey, individuals who were sent an incentive offer were 19.5 percent less likely to use a payday 

loan in the past year compared to the control group; this represents a 3.1 percentage point 

decrease in reported payday loan use. Individuals who were sent a direct mailer were estimated 

to be 35.8 percent, or 5.1 percentage points, less likely to report using a payday loan than those 

in the control group, although this difference was not statistically significant. 

If we look more specifically at survey responses from participants in individual treatment groups 

(not shown in Figure 3), we estimate that pilot participants whose email messages included a 

combination of the incentive offer, encouragement to save, and encouragement to enroll in 

 

24 This particular survey response option mentioned both payday loans and paycheck advance services. For simplicity, 

we use the term “payday loan” when describing responses to this option. 

25 The control, incentive, encouragement, and direct mailer bars all represent the estimated causal impact of each 

condition, controlling for all other conditions, displayed as a change relative to the control group. Error bars 

represent two standard errors above and below the change.

26 Results derived from survey responses are reweighted to account for relevant population and survey response 

characteristics. As such, values reported in this section are estimates based on actual survey responses from a subset 

of pilot participants. 
24 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

automatic transfers to the savings feature, were 40 percent, or 5.8 percentage points, less likely 

to use a payday loan in the past year than those in the control group, which is a statistically 

significant difference.

FIGURE 3: DIFFERENCES IN REPORTED PAYDAY LOAN USE BY CONDITION RELATIVE TO CONTROL
25 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

5. Summary

Across the income spectrum, consumers report a desire to save more than they actually do.27

This mismatch between intentions and behavior in the savings space can be influenced by many 

factors, including insufficient income to cover regular expenses, an abundance of debt, or a lack 

of a convenient and readily available savings vehicle. While each of these barriers to saving can 

occur across the income spectrum, such barriers may be particularly problematic for those with 

lower levels of income. These individuals are more likely to be unbanked, and therefore may be 

less likely to have access to and use traditional tools that make saving for emergencies easier, 

such as an account dedicated to savings. The research pilot conducted by the company and 

CFPB explores strategies to encourage consumers to set aside money for future use, employing 

an alternative savings vehicle for individuals who may not have access to or choose not to 

participate in traditional bank accounts: a savings feature on a prepaid card. 

The trial pilot program described here employed various treatments aimed at encouraging 

prepaid card users to enroll in and use a savings feature on the prepaid card. 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. 

Importantly, non-zero balances remained remarkably constant through the remainder of the 

 

27 According	to	a	2014	Gallup	poll, 62 percent of	all	Americans	stated	that	they	enjoy	saving	money	more	than	spending	it	

(report	found	at:	http://www.gallup.com/poll/168587/americans-continue-enjoy-saving-spending). However, data	from	the	

U.S.	Department	of	Commerce	show	that	the	2013	average	personal	savings	rate	was	5 percent,	which	was	the	lowest	rate	

since	2008	and	low	historically; the	U.S.	average	personal	savings	rate	in	the	1970s	was	11.8 percent,	9.3 percent in	the	1980s,	

and	6.7 percent in	the	1990s (report	found	at:	http://www.bea.gov/newsreleases/national/pi/2016/pdf/pi0716_hist.pdf).
26 CONSUMER FINANCIAL PROTECTION BUREAU: TOOLS FOR SAVING

year, suggesting that for consumers still using the savings feature, balances generally did not 

decrease even after the treatment period ended. That is, being offered a one-time, nominal 

incentive to save appears to have lasting effects on behavior even months after consumers are 

offered the incentive. In addition, the provision of a simple refrigerator magnet encouraging 

individuals to picture what they can do with money they save using the savings feature drove a 

significant increase in enrollment compared to the control group. 

Taken together, these findings indicate that simple, low-touch methods of encouraging uptake of 

a savings feature on a prepaid card drove customers to take an action that resulted in reduced 

utilization of a high-cost source of credit, as evidenced by the impact the treatments had on 

reported payday loan use. Participants who were offered an incentive reported significantly less 

payday loan use than those in the control group. 

As with any field study, the findings of the pilot conducted by American Express and CFPB may 

be unique to the Serve population and may not translate to other prepaid card users or other 

similar products offered by different industry players. However, the results emerging from this 

pilot suggest that incentivizing prepaid card customers to save, and providing an opportunity for 

them to do so using a savings feature that keeps separate funds earmarked for saving, could 

provide tangible financial benefits. Consumers in this pilot were not only willing to take up such 

a feature, indicating interest in alternative savings vehicles, some customers also reported actual 

changes in their financial behavior.