Members who put $25 or more into a Save to Win one-year CD are entered into a monthly “savings raffle” for prizes up to $400, plus one annual drawing for a $100,000 jackpot. Only Michigan residents are eligible to participate.

This unusual CD is federally guaranteed by the National Credit Union Administration and pays between 1% and 1.5% annual interest, a bit lower than conventional rates. In 25 weeks, the program has attracted about $3.1 million in new deposits, often from people who have never been able to set money aside.

The New York Times‘ Freakonomics blog calls it “A Lottery for Smart People”, but I prefer “A Smart Lottery for Stupid People.” As the WSJ notes above, their rates are fairly low — about the same as an online savings account. Usually the deal with CDs is that they pay out more in exchange for keeping your money tied up for a while, so a measly interest rate is quite a handicap. And a quick glance at the rules on their site shows that individuals can enter up to 120 times per year for a chance at $415 of monthly prizes and the $100,000 annual grand prize, so the probability of winning is quite slim.

(So, if you live in Michigan and have a bit of income to save every month you should almost certainly buy a CD based on the best rate you can find, not whether it enters you into a raffle.  Start with the always-excellent Bankrate.com’s CD rate comparison tool.)

But putting practical considerations for Michiganders aside for a moment, the idea itself is quite good. One of the problems with savings accounts, CDs, and low-risk long term investments is that they aren’t very exciting. How often have you heard someone at work crowing about the 1-year 1.8%  CD they just bought? We bet about never.

And if you didn’t know very much about investing or saving, what would spur you to put money into something that guaranteed such slight returns? Programs like Save to Win are great because they put a fun, sexy face on what is otherwise boring (yet smart) behavior. Expect to see it widely imitated.