Microfinance institutions in developing countries increasingly offer a variety of savings products. Yet few studies have investigated the impact that savings product designs have on client savings levels. With this in mind, IPA designed the SEED (Save, Earn, Enjoy, Deposit) commitment savings product in collaboration with Green Bank, the largest rural bank in the Philippines.

A SEED account is a savings account with the three unique, critical design features: one regarding withdrawals and two optional features regarding deposits. The withdrawal feature required individuals to restrict their right to withdraw any funds in their own accounts until they reached a self-specified and documented goal.  For deposits, clients were given the option to automate transfers from a primary checking or savings account into the SEED account. Clients were also given the option of buying a lockbox to store their money, with only the bank possessing a key. The interest rate paid on the SEED account is identical to the interest paid on a normal savings account. Thus, other than providing a possible commitment savings device, no further benefit accrued to individuals with this account. Using the administrative data and independent household survey data, we identify the characteristics of the people who are attracted to the commitment savings product and measure the impact of access to a commitment savings product on the household savings level.

The study sample consists of 4,001 Green Bank clients who have savings accounts in one of the two bank branches in the greater Butuan City area. Half of these individuals are randomly assigned to the treatment group, which receives marketing on the new savings product (the SEED account). One-fourth of clients are assigned to the control group. The remaining one-fourth of the clients are assigned a third group, the marketing treatment group, and are given the same marketing campaign as is received by clients in the SEED treatment group, except that the marketing is strictly limited to conventional and existing savings products. If the marketing impacts savings levels, we can subtract that amount from the effect on the SEED treatment group to determine the true impact of the SEED savings product.