SmartyPig Review

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SmartyPigNot too long ago, when SmartyPig first debuted, I complained about how high SmartyPig’s fees were. I wasn’t the only one and shortly thereafter, they dropped many of those fees and restructured their program a bit. I think it’s a testament to their openness to feedback and willingness to adapt to their customer’s needs.

So what exactly is SmartyPig? It’s a website that helps you save towards your goals, giving you a high yield interest rate (currently 2.01% APY) and the ability to have family and friends help you save towards your goal. When you’ve achieved it, you can access it by having it transferred back to your bank, converted to a debit card, or converted to a retail gift card.

How SmartyPig Works

One of the big benefits of ING Direct was how easy it is to open new accounts for various savings goals. SmartyPig is setup with that same goal in mind, making it easy for you to setup savings goals. The difference is they add a social element, other people such as your friends and family members can contribute to your goals as well (if they fund a contribution with a credit card there is a 2.9% fee, I suspect this is to cover the credit card processing costs).

You can set a savings goal for anywhere from $250 to $250,000 and your minimum deposit has to be greater than $25 to start your goal. Then, each month, you must contribute at least $10 and your savings earn interest (currently 2.01%). Then, once you reach your savings goal, the monthly contributions stop and you can decide what you want to do from there. You can continue to contribute, convert it to a gift card from one of their partners, or have it transfered back into your bank account (for free, this was one of the fees they dropped!).

Gift Card Conversion

Besides the 2.01% interest rate and the ability to send money around, probably the biggest value-add of SmartyPig is in gift card conversions. You can convert your savings into a gift card or voucher to one of their partners with a percentage bonus.

For example, let’s say you decided to save money for a couch. When you’ve reached your goal, you have several options. You can simply transfer the funds back into your bank account or you could convert it into a Macy’s gift card. If you decide to convert it into a Macy’s gift card, you get your goal amount plus 12%. Macy’s is by far the most generous but there are other vendors such as Barnes & Noble (5%), Bed Bath & Beyond (4%), iTunes (2%), The Home Depot (3%), and more.

This can significantly boost your savings’ interest rate.

FDIC Insured

Your money at SmartyPig is FDIC insured up to $250,000 as the funds are held at West Bank, which is itself a 115-year-old subsidiary of West Bancorporation (WTBA). Anytime you are looking at a bank, and SmartyPig is essentially a bank account, you need to ensure that your money is protected in some way by FDIC or NCUA insurance.

The final question, after you understand how it works and that your principal is protected, is whether getting 2.01% APY and a potential secondary pop if you convert to a gift card is worth the hassle. I’m discounting the social aspect of SmartyPig, where friends and family can contribute towards your goal, but everything else makes me think that it’s only worth it if you have a large goal in mind and can benefit from the gift card bonus.

I do like the idea of people savings towards their goals with a service like SmartyPig, rather than borrowing via store financing or a credit card. I think with the recession, a lot of people are reverting back to novel ideas like saving up for something. 🙂

If you have personal experience with SmartyPig, please share them with in the comments below. I’m especially interested in any headaches or issues you may have experienced, I’ve learned that they seem pretty receptive to that and hopefully we can get any headaches resolved. If you have a great experience, please share those as well!

{ 76 comments, please add your thoughts now! }

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76 Responses to “SmartyPig Review”

  1. Jeanette says:

    Looks like a great way to save. One comment I saw on another site is that they don’t allow you specify a beneficiary on the account & it might be costly to get the money to get out in the event of the account owner’s death. Any thoughts?

  2. Torrey says:

    I called Smartypig’s number listed on the website and had questions about right of survivorship. They took my name and number and had a rep from West Bank call me. I just got off the phone yesterday (20 April 2010), and was informed they just added that benefit to the website. It is automatically part of the registration now. I haven’t done it yet, but it sounds like i will be able to get my wife added as the recipient of the funds should i die before i withdraw them.

    ALSO, the rates and structures of rates has just changed. For accounts less than $50,000 the rate has gone up to around 2.5%, and for accounts over $50,000 the rate drops to around 0.5%. This will go into effect sometime next month, or in June. When asked why this is the case, the rep from the bank explained their intention is to benefit the little guy who is trying to save for goals (as opposed to a service for people to just park large sums of money).

    I guess within each account, multiple goals can be set up, but only as long as the sum of the goals is less than $50,000 (including any earned interest mind you) will the higher rate be earned.

  3. Danielle says:

    I’ve used it… I saved for a new LED TV as well as a trip to Las Vegas. I’ve cashed both of those out (transferring back to checking account) with no hassle.

    I continue to maintain an account for Car Repairs.. which I haven’t had to touch yet.

    Now, I’m starting to save for a trip to Europe in 2012. I will continue to stand by smarty pig!

  4. I have been thinking about moving my savings to smartypig and setting up about 6 goals. After reading your review Jim, I am not sure I should. You state that in order to qualify for the 2% interest rate you have to contribute at least $10 a month. Is that per goal or per user account? I’ll have to do some more research to find out, but if anyone knows the answer let me know. Thanks.

    • SwtThng32 says:

      Actually, they don’t require automatic contributions anymore. Now, you can choose from different options for the automatic contributions.

  5. nuevo.donna says:

    This company has one fatal flaw IMO. Yes, they have very competitive rates, yes, they have interesting features which assist you in organizing and staying current with savings goals. Here’s the problem, if there is anything remotely time sensitive about your goals, and you aren’t very careful you might end up royally screwed. Here’s the issue:

    1. You are REQUIRED to fund the account every month. You may NOT opt out. You have flexibility to alter the amount of the contribution, but you may not pre-emt it. It’s going to happen and once it does, your funds are locked in place. All of them are locked in place. In my case currently a monthly contribution of $29 was scheduled to occur on the 1st. It didn’t happen till the 3rd. Now when I try to close a savings goal totaling over $28,000, I’m told I may NOT close it out and have access to any of my funds until that tiny transfer of $29 is completed on the 10th!!!

    This is odd because according to their own faq, “ACH transactions take 3 business banking days to clear. SmartyPig defines funds as having cleared once SmartyPig has collected the funds and has full use of the funds.”

    When I finally get my money, I’m through with SmartyPig. However they may not be through with me. I’ve been saving these funds for 2 years for a surgery. If I miss it now because I’m unable to fund it in time, they WILL be hearing from my attorney. No company should be allowed to hold YOUR money hostage for such trivialities. This isn’t a CD. It’s a savings account.

    • Stan says:

      Actually, you are incorrect. When you set up your goal with SmartyPig, you can choose “None” for the recurring contributions so nothing will be taken out each month.

      And, they do require you to wait around 4 days after the funds post to your goal because your bank could go in and reverse those funds at anytime during those 4 days. So they would have given you money that your bank took back. I don’t blame them for making you wait.

      • em says:

        I’ll stand corrected on the issue of monthly withdrawals. I have to assume that this is a feature that was recently added. I had a long exchange about this very subject with them when I opened this account because the way my monthly accounting works I didn’t want to have to plan for X amount to be in my source account on some particular day. I most especially didn’t want an automated payment to accidentally trigger a costly overdraft from my bank. I was told by their support that this is not a plain savings account and is instead structured for mandatory savings so some amount would have to be transferred to them each month. It was suggested to me that I set my goal’s time line 50 years in the future to ensure that only the most trivial amount would be deducted each month which is what I did. I then subsidized that with much larger manual contributions when I was ready to. I just checked, and you are correct those auto debits can now be stopped entirely. I wish I’d know because I would have turned them off a long time ago. They were truly annoying to me, and knowing about it would have spared me a huge amount of stress.

        As for the wait time, I’m sorry but you’ve not considered carefully my real complaint. It wasn’t that the new speculative funds were an issue for me. I really didn’t care about $29 or whatever. I’d have been more than content to let them hold that. I was upset that they would freeze 1000 times that amount which had been accumulating for almost two years. They aren’t doing this because there is a risk of those funds being bogus. There is another reason, and frankly I don’t care what it is. I don’t care what the mechanism is they are using to make money off of my money as long as they aren’t taking it to vegas. That’s their business, and it quite possibly has something to do with the comparatively high return they offer. Additionally you mention the span of 4 days, but as I think I pointed out, the span in question was 11 calendar days from the time the monthly debit was scheduled, that’s more than a third of the month.

        I just think they should be a bit more forthcoming in synthesizing all of their restrictions into one concrete example so that people are well aware of the ways in which this account differs from a conventional full access savings account. I’m not the only one who misunderstood this policy because I found many examples online where people thought they could take out their money any time, and it isn’t so. In fact I am the only person to my knowledge that has made this observation in a review. This fact can have very negative implications for a person and it needn’t be so if the person is adequately warned.

        • Tamala says:

          Thank you for this review. I wondered about this feature as well. I currently have a small account with them, but I get an uneasy feeling, as I do not see an obvious and visible link to have my money transferred back to my account whenever I please. I have shortened the length of the savings goal as a result.
          That is one feature that I like about ING, although the rate is currently very low you are able to have access to your funds whenever you wish to have the money put back into your bank.

          • Anonymous says:

            If you turn off auto transfers and just contribute manually to the account than you won’t run into the problem that I did. Just make sure that you know before you manually initiate a contribution that doing so is going to lock up your account for a period of time so if there is a chance you’ll need it, then don’t make a contribution.

            Getting your money back is straightforward. All you have to do is to close the goal, and be sure and pass through the screens where they offer to put your money on a spending card (unless that is what you wish to do with it). Then you are presented with the option to return the cash to the same account that was used to fund it with originally. I don’t know what they do if the original funding account is closed.

  6. Hannah says:

    Old post, but I bought a trip to Europe with a credit card that has 0 interest till February 2011. Between now and February 2011, I set up my Smarty Pig account so that when the final bill is due I can pay it in full! I’m just paying minimum due amount for the time being. Smarty Pig is like my discipline.

  7. WHPROMO says:

    Before doing business with a financial institution, you should always check up on it. The bank that is behind this product is NOT in the best financial health right now. Even if it is FDIC insured, it takes a lot of time to collect on your funds if the bank goes into a receivership. This is advice from someone who has gone through this in the past. ING and some of the others mentioned here are in much better financial shape.

  8. jane says:

    Wut is up with the smartypig website?? It’s been jacked up for about 2 days straight now. Can’t login. RED FLAG!!! dont think i will b dealing with smartypig n e more.

  9. Chris says:

    Their front page website has been jacked for a few months now. I pointed this out in an email to them a month ago and had no response or solution done for it. Poor quality if you ask me.

  10. Veronica says:

    Smarty Pig SUCKS – you can’t withdraw partial funds –
    if you want to close a goal you can only deposit back into the account the money the account came from even if you have done transactions with other banks with them. POORLY DESIGNED – Customer Service were really RUDE too the lady started yelling at me. RUN don’t walk away from Smarty Pig.

  11. Anonymous says:

    Love it so far!

  12. Rebecca says:

    I’ve been a champion of Smarty Pig for some time now. I think their features are bold and that they have led the way for the future of online banking.

    But sadly, since this post almost a year ago, Smarty Pig had dropped their interest rate twice now. It’s now at 1.35%…which isn’t bad, but not stellar, either. Other banks give higher returns.

    While a lot of their features are quite innovative, I’m not sure if they will compensate for the decreased interest rate for me, so I am considering moving my money to another bank!

  13. Wondering Banker says:

    Which banks give a higher return than 1.35%? It seems to me like all brick and morter banks give less than 0.5%, While ING gives 1.10 apy and Ally gives 1.20%.

    My current bank only gives me 0.01% and I want to move my emergency fund to some bank to at least keep with the pace of inflation.

  14. Anonymous says:

    HSBC gives 1.0% APY.

    I have been with them for years and not had a single problem with them.

    • Joe Momma says:

      HSBC just lowered their rate to 0.90%. Soon, you will have to pay them to keep your money!

  15. T-Money says:

    I was just about to sign up for a SmartyPig account when I found this little tidbit in their small print: interest is credited and compounded QUARTERLY. So, they may have one of the higher interest rates in town (currently 1.35%), but my AMEX savings account (currently at 1.15%) will grow at a slightly faster rate due to it’s monthly compounding policy. Do the math and let me know if I’m wrong about this 🙂

    • Mike says:

      You are correct in saying a monthly compounding is better than quarterly, but with the interest rates you have given, the 1.35% quarterly is still a better interest rate than the 1.15% monthly compounding. With interest rates so low though, the effect seem moot.

      Just so you know the math behind: if you put 1000 into an account with 1.15% compounded monthly, after 1 year you would have 1011.57. After 2 years, 1023.26. In the account compounded quarterly, after 1 year, 1013.57, after 2 years, 1027.32.

      I know, sounds minimal but the higher interest rate wins here.

  16. Bradford says:

    Stay AWAY from Smartypig! These guys are serious bad news. I tried to close an account with them and they made me wait 9 business days!! I had over $41,000 with them in deposits and I tried to close the account – but they held it up because they needed 9 (that’s NINE) business days to verify whether a recurring (get this) $10/month fund deposit would in fact clear. When I explained that they were holding $41,000 that I needed access to within 5 days hostage for $10 (which they could simply credit back or hang on to for all I care), they SO could not care. stay away from this bunch – quite rude and inflexible. Oh and their wbesite really works hard to hide their phone number from you….

  17. Wince says:

    Agree with Bradfrd above – they seem to take an inordinate time to close your account and get you your $. Calling them to complain gets met with not even a polite get lost. You can do better

  18. Sergey says:

    It’s true about dying and loosing your money – if the account is not in trust or some other legal mechanism – it will go through probate and your family will get pennies on the dollar. THIS IS A MAJOR HOLE – CONSUMER BEWARE

    • Nothingbutthetruth says:

      Sooooooo, that’s how they make their money. They are banking on people dying with a massive savings built up. I knew this was too good to be true.

  19. Anonymous says:

    how does smartypig make money!??!!?!??!?!

  20. YNM says:

    I have a friend who opend an account up for their adoption fund. I would rather make a deposit to their SmartyPig fund than buy them a gift I have to pay shipping on. I think this is a great idea for adoptions, college funds, weddings, or even buying a home. I see the glass half full, it’s a great idea. It’s almost like friends and family taking care of each other without really even noticing it.

  21. Randall says:

    When withdrawing money from Smarty Pig, be sure to allow a very long time for receipt of the money in another bank account. Their policy is to make you wait (usually 2 weeks or more) until the next automatic payment has cleared the account. Even if you create another account, the policy holds. It stinks when you need the money quickly.

    The interest rate has dropped dramatically, so it is no longer a good deal. There must be better ways to save and get a good interest rate. Who knows of one?

  22. Judy says:

    I have been with SmartyPig for almost two years, and have already had multiple accounts. Easily opened and easily closed. I also had the availability of a beneficiary from the start.

    I WAS aware when I singed up that I had to wait two weeks to get any money from accounts. If you were to read when you signed up, then you would know this.

    Interest is still a little better than local banks, but I love it because the money is NOT quickly reachable , therefor sits where it is.
    Saving towards retirement? Great. Wanna go to Walmart instead? Good, but I’m not using the retirement addition or Christmas Club account to shop with.

    I don’t social share, and am not interested in that. I am interested in having money that isn’t readily available to get out. How many times have you decided to use th Christmas club money for something else and took it out, penalties and all? There are NO penalties here for closing out an account early.

    And, I can promise you that if you needed to close an account, knowing that you had to wait two weeks, you could bring proof to the people who you owned the money to that you have it, and they will wait. If you’re trying to say different, then your not telling the truth.

    If you are just shopping around for higher interest, you can give that up. The economy doesn’t pay great interest anywhere. Just suck it up and add more to your account to make up for low interest rates. I REALLY hate people ho bash companies for not kissing their butts. Your greedy egotistical attitudes says it all about why the economy is like it is today.

    SmartyPig is open to all of us, even if we don’t get to put thousands of dollars a year in the accounts. I haven’t had a job in three years. I am grateful to have someone like this who lets me have a long term retirement with no mandatory addition. If I can’t afford my monthly deposit, I just void it. They don’t care, and I am happy. I don’t need a massive amount to have this open and there are no penalties if something drastic in our lives comes up and we need to close it out. I will happily wait the two weeks to have a bank that caters toward a normal family.

    Later,if interest rates go back up everywhere else, it will here too.

  23. Rhea says:


    I agree with you 100%. I have had my Smartypig for over 2 years and I love it! I use to be one of those people who have money in different banks so I won’t be able to touch it. I have saved an ample amounts of money with this service. Yes it takes about a week and a half to get my money, but that is why I end my goal date 2 weeks prior to when I need it. I guess that’s what so great about this service, you can’t easily take your money out…hence, it allows you to think about your purchase longer and the necessity of it, stops you from impulse buying, and you end up saving more money in the end. I’ve richly taken all but one of my money in different banks and included it in a long term goal. 1% is always better than .30%.

    I have told my friends about this service and majority of them have started their own accounts and have been saving more money with this service than they could them selves.

    If it helps you, use it. If it doesn’t, then take your money somewhere else.

  24. Louis says:

    I really like the concept behind SmartyPig. I set up one savings account and use this as a specific acct for a relocation goal of mine. I also use the debit card – specifically for all of my groceries. It was very easy to set up my accounts and very easy to use the iphone app and to move my funds around and to see my transactions in close to real time. I take advantage of the recurring monthly savings options and so far so good. I highly recommend SmartyPig!

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