Increasing savings is an important part of improving the financial security of households in the Philippines. Savings levels have a tendency to be low in developing countries so any policy or intervention that could raise savings rates could improve the financial health and stability of low-income households. IPA is conducting a series of experiments that test various savings product features to better understand the demand for savings products and identify the product features that could successfully mobilize savings among poor households.

First Valley Bank offers and actively markets a savings product that allows clients to set a savings goal amount and a date for that goal in the future. The client will not be able to withdraw the funds in the account until the goal is met. The bank administers a survey to households the marketers reach and then offers a random variant of the savings product to the household. IPA will then analyze bank transaction data to determine what best motivates individuals to deposit more money in their savings accounts.

The savings account variations include:

• Sensitivity to interest rates: By analyzing the take-up among clients who are offered different interest rates, we will study the sensitivity to savings interest rates.

• Effectiveness of different forms of deposit reminders: We randomly select clients to receive weekly/monthly reminders to make deposits toward their savings goals either in the form of text messages or flyers and study the effectiveness of giving reminders to clients.

• Effectiveness of gain/loss framework of deposit reminders: Among those who receive reminders, we vary the reminder contexts—some will receive messages that emphasize the positive aspects of reaching the savings goal and others will receive messages which emphasize the negative consequences of not reaching the savings goal. The study will test the psychological effect of the gain versus loss framework of the reminders.

• Effectiveness of providing continuous motivation to save: Research about the psychology of saving suggests that one reason individuals are unable to save as frequently or reliably as they want to is that the temptation of spending their money on something other than savings is too great. By giving a client one piece of a puzzle that depicts his individual savings goal each time he makes a deposit, we will test whether it is possible to bring forward the benefit of saving and remove the temptation to spend that money elsewhere.