March Madness CDs and Other Bank Promotions - Good Idea or Unwanted Gimmick?

As I just reported, Countryside Federal Credit Union is offering another March Madness CD promotion in which you can get a higher CD rate if you pick the correct teams. There is still a competitive base rate even if you don't get any picks correct. Countryside has offered this for several years. This is the first March Madness CD I've seen this year. If you know of others, please leave a comment.

These promotions are interesting, and they can be good deals. However, do you think it's a good idea? Or is it an unwanted gimmick?

A reader in last year's post commented:

what's next "CD lottery", this is silly stuff, a CD is serious stuff to most people, not some dumb game, they need to be straight forward and have the "best" rate available period.

Do you agree with this reader, or do you see a benefit with such a promotion?

In the case of the Countryside CD, the base rate is still competitive. So even if you don't get any picks correct, you'll still receive a competitive rate. The credit union is probably planning that the average member will only get a few correct picks. So the average rate they will pay will probably be just above the base rate. It's a little like those product mail-in rebates. Manufacturers expect a certain percentage of customers won't bother. I suppose the credit union could just offer a yield a little higher than the base rate of this promotion without any game. However, the credit union may be able to offer a little higher average yield with this promotion since it gets more attention and free advertising. That can provide a little help to savers.