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SmartyPig’s Exhorbitant Fees Help You Save

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Since this writing, SmartyPig has removed many of the fees associated with their accounts and so is not as bad as this post makes them out to be.

If you read any other personal finance blogs, you probably have seen a lot of posts about this new type of savings called SmartyPig, run by West Bank. They bill themselves as a different kind of bank account and they’re sporting a pretty healthy 4.30% APY savings account, until you realize that they’re charging you some ridiculous fees!

Here are the fees from their Terms & Conditions:

  • Contributing funds to a public account via ACH, Electronic Check and Credit/Debit Card, a $4.95 processing fee per contribution will be charged to the purchaser.
  • Purchasing a physical or electronic gift card via ACH, Electronic Check and Credit/Debit Card, a $4.95 processing fee per card will be charged to the purchaser.
  • Unsuccessful attempt of transfer of funds, $25.00 per occurrence will be charged and debited to the customers ACH bank account.
  • Replacement of a lost, stolen or discarded SmartyPig MasterCard® Debit Card is $20.
  • Requesting funds on a check in lieu of placing funds from a Savings Goal on the SmartyPig MasterCard® Debit Card or Retail Gift Card will incur a $25 processing fee. To complete this transaction, the Primary Account Holder must contact SmartyPig Customer Support. Not available to minors. Waived when required by law.
  • Overdrawn accounts will be charged a $27 fee per overdrawn item
  • I’m not going to rehash the point and purpose behind SmartyPig, for that you can hit up one of the posts above, but to the untrained it eye it sounds a whole lot like you’re paying a lot for the opportunity ($5 each time someone contributes, how does that motivate saving?) to help someone save. Not only that, but the end product isn’t even an ACH deposit into the saver’s account, it’s a debit or gift card (minus $4.95)! (if you want an ACH transfer of funds, that’s $25 please)

    This seems like a raw deal, is anyone else seeing this differently? (though do enter those contests for a free $100)

    { 10 comments, please add your thoughts now! }

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    10 Responses to “SmartyPig’s Exhorbitant Fees Help You Save”

    1. Jeremy says:

      The way I read it, the fee for contributing funds is only if a non-account holder gifts the money to fund a public goal. It says that account holders who make contributions to private goals can do so for free. So I guess if you’re relying on outside gifts to fund your goal, that 5 bucks is a bit of a raw deal, but you’re still just receiving a gift. You aren’t personally losing the money by saving yourself.

      The other fees don’t seem too out of line. 27 for an overdraft, 25 to request a check might be a tad high, and 5 bucks to get a gift card isn’t terrible.

      So I would think that if you use it as a primary means of saving for yourself, don’t overdraft your account, and only utilize obtaining a gift card when you’ve built up a sizable amount, it isn’t too bad since it can really personalize saving money.

    2. Jeremy says:

      From their FAQ:

      “Making recurring monthly contributions to your SmartyPig savings goals is free using your current checking or savings account. There is a $4.95 processing fee if you make a contribution to someone else’s public SmartyPig savings goal.”

      And there is no fee to have your funds put on a SmartyPig Check/ATM card. So really, if you really just use this as a savings account to fund your own goals, and when reaching the goal, get the funds on their ATM card, it won’t cost you a dime, except for any possible ATM fees for withdrawing the funds, or you could just use it like a debit card.

    3. Pinyo says:

      Yeah, I liked the concept but thought the fees were a bit much. I missed that $5 to get a card, that’s bad!

    4. Stngy1 says:

      Apparently they are restructuring a lot of the fees, so you may want to revisit the website in a few days.

    5. Jon says:

      That $5 charge seems to make the whole site lose it’s purpose. It instead becomes just another online bank, with admittedly a higher interest rate than most (which I’m sure will drop down next month after they’ve done all their press).

    6. Anonymous says:

      Thanks for the post! To clear up a few things for your readers, first there is no fee to take the retail gift card or MasterCard debit card. Opening, funding and redeeming a goal with SmartyPig is absolutely FREE. As for public contribution fees, later today they will go away for SmartyPig customers. SmartyPig customers will be able to make contributions to other SmartyPig users’ goals and buy SmartyPig gift cards at NO cost if they use their existing SmartyPig funding source, i.e. their checking or savings account. The fee to make a contribution or buy a SmartyPig gift card (called “Give the Gift of Savings”) using a credit card will be set at a flat 2.9% (basically the same as using PayPal), and we are also planning on releasing a few other payment options and redemption options in the near future, as well, so that using SmartyPig will be economical for all users. I invite anyone here to e-mail me at with any questions. Much appreciation, Jon Gaskell, Co-Founder SmartyPig

    7. Tom says:

      The Co-Founders of SmartyPig have been responding to comments on the other blogs and have been stressing that they will be restructuring their fees. Look for posts from Jon Gaskell or Mike Ferrari. It looks like they will be eliminating the ~$5 fee for contributions to others goals if you have a SmartyPig account. They will be charging 2.9% flat for all outside contributions w/ credit card, which is basically similar to PayPal if you x-fer money to someone else and they move it into their bank account.

      I, personally, don’t like the $25 fee if you transfer your $ into a bank account, but I understand that they want people to use their gift cards and retailers.

    8. Tom says:

      And there you go…

      Jon and Mike have been all over the PF blogs. Seems like they have been taking the comments seriously and been making some very positive changes.

      I signed up last week and say why not sign up? You’ll be getting 4.3% APY, and if you get a gift card from one of the retailers, that’ll be an extra (up to) 5%.

    9. HisMoney says:

      I had some of these same concerns. It appears that SmartyPig is listening to their customers and taking steps to reduce some of the fees. I was a little concerned at first at having to either pay to get my money out or wait for the debit card. However, I’m getting a decent return on my money and am putting money towards specific things that I am intending to purchase instead of using a credit card, not using it as emergency savings, etc… I will also check prices on those items and if I get a comparable price on it through one of their partners, that’s an extra 5% return!

    10. Warlock says:

      I have a question, according to the T&C (below) interest is compounded daily but only on the pricipal in your account, which seems to only grow when interest is “posted” which is quarterly…is this a way to seriously reduce compounding or am I reading it incorrectly? Please answer only if you know (ie are a member and can look at a statement to determine or if you work for SmartyPig/WestBank)

      Compounding and CreditingFrequency – Interest will accrue daily. Interest will be posted to your account quarterly.

      Effect of closing an account – If you close your account before interest is credited you will receive the accrued interest.

      Balance Computation MethodDaily Balance Method. We use the daily balance method to calculate the interest on your account. This method applies a daily periodic rate to the principal amount in the account each day.

      Thanks in advance for your considered response

      – Warlock

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