PrizePool Saving Review – Linked Prize Saving Account [1 Million Prize, 500k FDIC Insured]

8/13/2023 Update: PrizePool has partnered with banks to provide FDIC insurance on up to $500k of deposit (usually FDIC insurance covers up to $250k; see PrizePool FAQ for details). This is similar to how various other players, like Primus, are also bumping their FDIC limit.

Additionally, the monthly drawing no longer includes a $10,000 prize. Instead, a $1 million prize is offered through the daily wheel (see details on changes to weekly drawings here). Overall, this is a downgrade since someone was guaranteed to win $10,000 once every four weeks. Now, someone MAY win a $1 million prize at any time but obviously, the odds are small.

A while back I wrote a separate, post going over their paid membership, called Stacked, which provides 4.5% APY, more tickets on deposit as well as card swipes. You can read about it in the link below.

Is 4.50% APY Worth $99/year? A Look at PrizePool Stacked.

6/7/2023 Update: PrizePool has updated terms and conditions to exclude certain merchants (money orders and financial institutions) from being eligible for debit reimbursements (image link). They still generate tickets.

2/19/2023 Update: Signup bonus is now $10 + 10k tickets (for both parties). Ten percent earning (for both parties) from weekly prizes is still intact. Requires a $500 balance by Feb 28, 2023, and needs to be held for 60 days. Read the Terms and Conditions here.

6/22/2022 Update: On April 27 the odd of reimbursement was 1/60 (1.66%). This promotion is set to now set to expire on June 30th. Although 1.66% is a huge downgrade over 5% it is still a superior odd than the maximum odd of reimbursement (1%) on Yotta debit card for regular purchases.

3/11/2022 Update: The probability of getting a debit card purchase reimbursed has been increased by 10-fold which means you have a 5% chance of getting your purchase reimbursed. Note that there is a spending limit of $2500 per day.

3/8/2022 Update: PrizePool debit card is available now. Get 30 tickets for every dollar spent and every day get up to $2000 reimbursed. The probability of getting a debit card purchase reimbursed is 0.50 percent. Approval of the debit card can be instant in which case you will see card numbers right away. The card is a Mastercard issued by Evolve Bank and Trust.

4/2/2021: On March 29, PrizePool announced they will also be adding a monthly saving bonus of 0.30% which IMO is a big change for those keeping a lot of money in PrizePool.

3/20/2021: From March 11th through April 1th (noon PST), referrer and referred earn 10k ticket after the referred makes first deposit. This is in addition to the existing 10% bonus through referral.

2/7/2021: On Feb 4th, PrizePool added a new prize tire and 15,000 new prizes into the current Series. They added 5,000 prizes of $0.20. While 20 cents is pretty much nothing it ensures that 5,000 people don’t go empty-handed.

1/8/2021: From today till February 18th, 2021 noon PT, PrizePool referrer and referred earn extra 5,000 tickets when the referred user makes their first deposit. This is in addition to the existing 10% bonus through referral.

PrizePool is a linked prize saving account that is available for everyone in the US. Essentially, you get a certain number of tickets based on the amount of money you have in your PrizePool saving account. The tickets will then be used for their weekly/monthly Sweepstakes. Currently, the monthly prize is of $25,000 while the weekly prize ranges from $2-$500 and nets another $25k.

PrizePool was launched on August 27, 2020, so it is a fairly new saving account. Your money in PrizePool saving account is actually held with Evolve Bank & Trust which is a member of FDIC.

From the conversation I had with PrizePool, I found that early on, some folks could get 1:100 odd of winning 25k which is insanely good. Since then PrizePool has obviously grown but based on some online metrics (Instagram with 104 followers, Twitter with 93 followers, Facebook with 85 likes and 92 followers, subreddit with 25 subscribers, 93 reviews on Google Play, and 381 ratings on App Store), it is fair to say that they are likely relatively “small enough” that they are likely worth your time.

Signing up with a Referral is a MUST

If you’re going to signup for PrizePool, you must use a referral. If you signup through a referral, you will get 10% of your winning and the referrer will get 10% of your winning as well.

https://links.getprizepool.com/1abMCSL4Ccb or use code Y17LK

In other words, if you use my link and win $25,000 monthly prize, then you will get an additional $2,500 and I will also get $2,500 as well.

Guaranteed Winner & Brief Comparison to Yotta Savings

Unlike Yotta Savings, PrizePool guarantees (see the section on how drawings work) that there will be a winner for each prize. For example, someone is going to win a $25k prize this January.

Furthermore, unlike Yotta Savings, the prizes are not split, meaning if you win $25k, you take $25k (+2.5k if you signed up using a referral). In comparison, in Yotta Savings, there are instances of people winning $1k but only getting $50 because the prize was split among 20 users.

Obviously, Yotta Savings has its own advantage like having much high valued, but far harder, prizes. Additionally, Yota Savings pays 0.2 APY while PrizePool does not have a base APY.

How Many Tickets and How Much Money?

You get 1 ticket per day for each dollar you have in your PrizePool saving account. Now each user is capped at 3 million tickets which is equivalent to having $100k with PrizePool for 30 days. This $100k is still within the $250k insurance limit of FDIC.

Let’s Talk APY

The idea of winning a big prize sounds great but you also want to know an expected APY. Here are the recent expected APY I have gathered from the PrizePool application:

1. Series 2 (which runs from Dec 25 to Jan 22): the expected APY at $1k was said to be 16.78%
2. Week 1 of 4 of Series 2: the expected APY at $1k turned out to be 14%

Chances of Winning

Here is the recent change of winning data I have gathered from the PrizePool application:

1. Week 4 of 4 of Series 1: if you had ~$500, you had a 58.63% chance of winning a prize. If you increase your balance to $1000, you improve your chances to 81%
2. In Week 1 of 4 of Series 2: If you had ~$500, you had a 30% chance of winning a prize last week. If you increase your balance to $1000, you improve your chances to 57%

It is interesting to see how the chance of winning for $500 and $1000 went down drastically went down by 28.63% and 24% respectively which suggests a fairly good growth in circulation of a number of tickets.

How Do The Drawings Work?

It is very important to realize that you can only win 1 prize per weekly drawing. Does this mean you get punished for having a lot of tickets? Well, not quite. Their system is set in a way that your chances of winning bigger prizes increase with the number of tickets you have.

Here is more or less a copy-paste from the PrizePool website on how the drawings work:

1. At the end of the week, we mix all the tickets together and randomly pick the winners – starting with the largest prize amount (by value) and then going down the list of prizes by prize size value (largest first).
2. Once the first winner is picked we then remove the rest of that winner’s tickets from the drawing since a user can only win one prize per drawing.
3. After the winner’s tickets have been removed, we then proceed to pick the next largest prize based on denomination.
4. We then continue steps 1-3 until all the prizes have been awarded.

Essentially the more ticket you have the more likely you are to get picked for the larger prize.

Questions I asked PrizePool

I asked Frank Chien, the CEO and co-founder of PrizePool, some questions, and here are the questions, along with his answers

Q: Since its launch, how much has the platform grown? How many tickets, how many users, % growth, and whatever you wish to share. More # the better.

Frank: We haven’t publicly disclosed metrics yet but we definitely have thousands upon thousands of users and millions in deposits. Growth has been great!

Q: What are some of the obstacles you have faced?

Frank: At this time, we’re happy with the metrics but would love a higher interest rate environment 🙂

Q: Who pays for the bigger prizes? Are they backed by an insurance company?

Frank: The deposit interest that is pooled together from all of the deposits! If there isn’t enough deposit interest to fund the PrizePool, we cover the difference. 

Q: The application says that for Series 2 the expected APY at $1k is 16.87% Can you elaborate more on this? How does the APY look for different values of deposit, say $500 or $25,000?

Frank: Sure, We simulated 100k drawings to calculate approximate frequencies each deposit profile will win a prize. Then we calculate expected value and annualize it. From the expected value for the year we divide by deposit amount for expected APY. The APY does differ between say $500 and $25k since you have a larger balance, but you have a much greater chance of winning a prize as well as a greater chance of winning a larger prize amount.

Q: The Week 4 Analysis for Series 2 says that if you had ~$500, you had a 58.63% chance of winning a prize last week. If you increase your balance to $1000, you improve your chances to 81%. Could you add further on it? How high are the odds if someone were to put $25k with PrizePool?

Frank: Sure, we run a monte carlo simulation of 100,000 drawings to calculate expected odds of winning a prize. You can of course add to your balance which increases the odds since you generate more tickets per day. The odds of winning a prize if you had $25k deposited with PrizePool is around 99% you winning a prize each week.

Q: From a business point of view, how sustainable is this? How do you make money when you’re handing out money every week?

Frank: At a certain deposit amount, the prizepool is breakeven for us. We are also launching other financial products soon that will offer other ways for us to monetize from such as a debit card.

Q: Do you expect to see more prize linked saving accounts like PrizePool in the future? If so, what are you doing to stay ahead of the curve?

Frank: We do and we hope to have one of the most fun ways to save money and earn a fantastic chance to win a meaningful amount of money. When we first started out, if you maxed out on tickets, you had a 1:100 chance of winning the grand prize, which is absolutely wonderful odds to win $25k with no risk. You can’t find that anywhere else. We plan on ensuring that the odds are relatively good for our users and the APY is one of the highest in the market.

Closing Thoughts

I have not crunched the numbers but at a quick glance, I think PrizePool Savings seems worth jumping on. I signed up all my family members for it and you probably should too. Obviously, use your own referral link to boost earnings within your circle.

One thing to note is that they’re slow with depositing your money and you can only link one bank account through Plaid. And should you wish to change your linked bank account, you’ll need to contact PrizePool.