I’ve mentioned before that I use SmartyPig as my savings account (as well as ING Direct so that some money is immediately available), but many people are unfamiliar with SmartyPig, so I thought I’d give my thoughts after using it for a few months.
For those who don’t know, SmartyPig is a savings program that is unique in that it is designed to help people save for specific goals. Instead of putting money into a savings account and letting it sit there accruing interest, SmartyPig members set up their goals and automatically contribute regularly, with the option of letting friends contribute, too (we’ll get to that in a minute).
I use my SmartyPig savings account for various goals and automatically contribute every two weeks.
2.15 1% interest rate is much higher than that of any traditional bank, and while there are a few steps you must take to withdraw your money, that means you’re less likely to use this money to supplement your checking account. But who cares? That’s not what savings is for!
One thing about SmartyPig that I’m not a fan of is the social aspect. If you choose to share your goal, friends and family can provide financial support. For most people banking is private and asking friends for money seems…weird. Sure, you can let people know that you are saving up for a trip to Europe, but letting them know that you are accepting donations just doesn’t seem right. I turned off this option for my account. My friends can do what they want with their money without feeling pressured. I use it more as a bank than as a way to connect with friends and beg for their money.
The withdrawal process for SmartyPig is very interesting. Instead of being able to transfer money in and out like a regular bank, users must close their goals before withdrawing. This doesn’t matter much because these goals can be opened again, but the automatic contributing must stop.
Then there are 3 withdrawal options:
- ACH Transfer – Send money back to your savings account
- Debit Card – They’ll send you a debit card that can be reloaded with money from future goals
- Retail Gift Card – Get a retail card with up to 112% of the money in your goal on it.
The retail card is where it gets interesting. With Amazon, Macy’s, and Barnes & Noble among the retailers, you can put all or part of your balance on a card to get the most out of your cash. When you select this option, you part of your money on the card, and they give you a little boost, which is always nice.
Of course, only use this option if you need something anyway! Don’t just get it because you think it’s a smart financial move!
Give It A Shot
Head over to SmartyPig and take a look around if you’re looking for a savings account with a fantastic interest rate. It’s definitely worth a closer look, and my experience so far has been fantastic. No complaints, and who doesn’t love earning extra interest on their money?
What bank do you use? What are the pros and cons of your savings accounts? Would you ever use the social aspect of SmartyPig?