Regional bank hits on novel way to attract business

February 12th, 2014 by Philip Brasor & Masako Tsubuku

Banner advertising housing loans outside branch of Keiyo Bank in Inzai

Banner advertising housing loans outside branch of Keiyo Bank in Inzai

Lottery winners who hit the jackpot are always good news stories, but the anonymous lucky individual who was the subject of reports in all major media on Feb. 3 represented a different angle on the topic. Instead of being announced by the authorities who administer the Year-end Jumbo Takarakuji lottery, the ¥700 million prize was publicized by a regional financial institution, Chiba Prefecture’s Keiyo Bank. That’s because the winner of the jackpot didn’t actually have the winning ticket in his or her possession. The bank was holding it for safe keeping.

With interests rates on time deposits being so low for so long, banks, especially smaller regional ones, have a tough time convincing people to become customers and usually resort to special premiums or deals. Keiyo’s is to offer lottery tickets as incentives to open savings accounts. For every one million yen deposited in a three-year teiki yokin (time deposit account), the depositor receives five lottery tickets per year for various drawings. Keiyo, however, only supplies the customer with the number of the ticket, not the ticket itself, which it holds on to. When the drawing is carried out the customer checks the number against the winners and if there’s a match the customer contacts the bank, which then gives the customer the ticket for him or her to cash in.

In this most recent case, the drawing was conducted in early January and the bank, knowing that one of its customers had won, waited for the customer to call. The person didn’t.   After a month, the bank finally called the individual with the happy news.

What’s most interesting about the story is that it isn’t the first time a Keiyo customer has hit it big. The bank has been offering the lottery incentive since March 2007, and in the intervening years there have been 34 ¥1 million winners, two ¥5 million winners and one ¥100 million winner. These numbers give the impression that Keiyo customers have a higher probability of winning, but according to a lottery expert interviewed by Tokyo Shimbun it’s difficult to figure the odds since the bank has never released the total number of tickets it has bought for customers over the years, but likely it isn’t that much because Keiyo is, after all, a regional bank with a limited reach.

As a reference, interest on a three-year time deposit is 0.03 percent, which means for the first year of a ¥1 million account the customer earns ¥300. That amount would buy one ¥300 lottery ticket before the government deducts its 20.315 percent tax on interest.

Side note: In December we wrote about the Post Office lottery for New Years cards. In case you still have them lying around and didn’t check the winning numbers here they are: If the last five digits on any of the cards you received are, in order, 9-7-0-8-5 then you win ¥10,000. If the last four digits are 2-3-4-4, you win a prize of some sort of regional product. And if the last two digits are either 7-2 or 7-4, you win a sheet of postage stamps. You have until six months after the Jan. 22 announcement date to claim your prizes.

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One Response

  1. Actually as the interest rate really is that 0.03 percent the customer would get just 300 yens from every 1 million deposited per year. After taxes that is then not enough to buy even one ticket.

    Therefore the offer of 5 tickets every year is a huge improvement over the normal. Personally with these interest rates I would still rather stuff my money inside my mattress…

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