5,500 enroll in savings bonus plan for Ohioans

8/19/2009

A state program to teach Ohio residents how to save money by giving out small bonuses has drawn 5,500 participants since its inception last spring.

SaveNOW, a program begun by Ohio Treasurer Kevin Boyce, rewards savers with an additional interest yield if they stay in a yearlong financial-literacy course and complete a program evaluation.

Participants get 3.25 percent in addition to the interest rate that participating banks pay on a savings account.

The interest paid today in Ohio averages 0.15 percent.

The plan, the treasurer said in April, was aimed at spurring more Ohioans to save and teaching them ways to put money into savings.

We re very excited about it. This program is hitting at just the right time, Mike Culp, the state treasurer s chief of staff, said yesterday.

Residents can still join the program by going to one of the participating banks.

The five banks involved are PNC/National City Bank, Liberty Savings Bank, Wayne Savings Bank, Mainsource Bank, and First National Bank of Northwest Ohio, of Bellevue.

PNC, which has several National City branches in metro Toledo, did not respond to questions about the program.

Under the program, participants deposit up to a maximum $5,000 in a savings account with a participating bank and then receive newsletters about topics including budgeting, credit and debt, and financial planning.

After 11 months, the customer receives an evaluation that measures savings and personal-finance knowledge.

If the saver passes the evaluation, he or she receives 3.25 percentage points of extra savings-account interest.

The state pays 3 percentage points of the interest and the bank holding the account contributes the rest.

The expected payout of interest has climbed to $35 million, with $15 million already authorized.

Maumee resident Ken Crothers enrolled in SaveNOW in May at a National City branch. He declined to say how much he put into his savings account.

The state was to send me educational materials on how to save money. They have not sent me that material yet, said Mr. Crothers, 85.

They also told me there will be an exam in November or De-cember. I m supposed to answer some questions on Did I learn how to save money? he said.

The state sent participants letters but is just now sending the educational materials, Mr. Culp said.

If a participant removes his money from the savings account before getting evaluated, he loses the 3 percentage points additional interest promised by the state. But Mr. Crothers said it is worth the wait, given the interest bonus to be paid. Have you looked at the CD rates lately? You can t get any more than a quarter of a percent from anyone, he said.

Contact Jon Chavez at:jchavez@theblade.comor 419-724-6128.