Case Study

Increasing Saliency and Mental Accounting by Auto- Opening Rainy Day Savings Accounts

Low-income households could only cover expenses for an average of six days if they lost their source of income. This lack of short-term savings threatens a family’s ability to handle economic shocks such as unemployment, an unexpected car repair, or a medical bill. There is an acute need to increase emergency savings in the United States.

Prior behavioral research has shown that changing the default from opting in (to contributing to an account) to opting out can increase uptake as much as 50 percentage points – for 401(k)s, only 40% enrolled when it was opt-in but 90% enrolled when it was opt-out. In addition, creating a mental account for emergency savings by labeling accounts was shown to increase total deposits in Ghana by 31.2% after nine months.

We partnered with the Duke Credit Union, a not-for-profit financial cooperative serving just over 16,000 members of the Duke University community, to explore how the creation of a mental account specifically targeted for “rainy days” might increase motivation to save funds in that account.

Behavioral Diagnosis and Key Insights

Like most credit unions, Duke Credit Union offers a typical suite of financial products, including checking and savings account, home and auto loans, and long-term savings products, such as IRAs. However, the median amount saved among all members is just $25. If we exclude people who have a balance of $0, it only jumps up to $140.

In designing this experiment, we kept in mind three key insights to inform our design:

  1. People already use natural mental buckets to decide how they spend or save their money, but those mental buckets don’t always align with their current accounts.
  2. There is no default for saving; all related decisions are driven entirely by the individual. What accounts should I set up? What should I call them? How much and how often should I deposit into them?.
  3. People are overly optimistic about their future financial situation and often downplay the likelihood of emergencies, and certainly postpone preparing for one.


We created a labeled savings account, called “Rainy Day Savings” to create and leverage a separate mental account for emergencies. Understanding the power of defaults, we designed a transparent default. Half of all new members were explicitly told that their new account came with a special, no-fee share account called a “Rainy Day Savings Account.” They were told that they could close the account at any time at no penalty. This was the opt-out condition.

The other half continued with business as usual and could choose to open as many share accounts and name them whatever they wanted. This was the opt- in condition.

For members with the account, they would see the labeled savings account each time they received their statement or logged on to their online account.

There were no fees or other costs associated with the accounts, nor was there any additional pressure around deposits into the account. New members were randomized into the opt-in or opt-out conditions based on the last digit of their account number.


The experiment was launched in early October 2016 and we collected data through October 2017. In the first few months of the experiment, we saw very high account closure rates among the opt-out condition. We attribute this to two factors:

  1. We launched our experiment around the same time as a large account opening scandal. We suspect this made both members and member service representatives uncomfortable with auto-opening Rainy Day Savings
  2. We believe that member service representatives were offering the account via active choice rather than via default (“Would you like this account?” vs. “You have this account. You can close it whenever you want ”).

However, in subsequent months, we found a greater uptake of the account. Therefore, we limited our analysis to new members from January 2017 to October 2017.

During this timeframe, there were over 1,500 new accounts opened. Of those accounts, 750 were given the Rainy Day Savings sub-account and 50% kept the account open. Members in the opt-out condition were statistically more likely to have more than one savings account at the credit union.

Interestingly, we found no difference in savings behavior (balance, frequency or amount of deposits, frequency or amount of withdrawals) between the opt-in or opt-out conditions. If we only look at our treatment-on-the-treated (the group who was in the opt- out condition and kept the account), we see a slight increase in positive savings behavior when compared to the opt-in condition. However, we cannot determine if this is due to a higher saliency and more frequent reminders of the account, or if it is due to selection bias and that those who kept the account were more likely to be better savers anyway.