Smarty Pig Review
By now I’m sure you’ve seen the reviews of SmartyPig all over the personal finance blogosphere. I debated whether or not to join the ranks of bloggers who did a review. I wanted, at the very least, a little bit of time to evaluate Smarty Pig before I formed an opinion.
Now that I’ve had a chance to play with SmartyPig for a while, I have definitely formed an opinion. And some things have changed since the first reviews have come out, and I think it’s important to point out those changes.
What Is SmartyPig?
SmartyPig is a savings program that encourages you to save your money for specific goals. And it’s a social program that lets others see and contribute toward your goal. When you sign up for Smarty Pig, you will have to create a goal. I decided to save money for Christmas. The minimum deposit to fund a goal is $25.
I didn’t have any trouble signing up. I know other bloggers have had a few issues, though. The most troubling part for me was trying to figure out a goal, but that’s not SmartyPig’s fault. :)
Lest you worry about the security of your money, funds added to SmartyPig are deposited into West Bank, which is FDIC insured. The current APR is 4.30%, which is even better than ING savings right now.
In order to fund SmartyPig, you need to add a bank account to your profile and give SmartyPig permission to make recurring withdrawals from your account.
If you make your goal public, your friends and family can make contributions to your savings goal, helping you reach your goal faster. Friends and family are not charged to contribute to your savings goal if they have their own SmartyPig account and use their existing funding source. If they don’t have a SmartyPig account and want to contribute by credit card, they will be charged a 2.9% fee.
Once you reach your goal, you have a few options for withdrawing your money. You can elect to receive a SmartyPig debit card, which is accepted anywhere Mastercard is accepted. Or you could opt to receive a giftcard from one of SmartyPig’s Best-in-Class retailers, which will get you an additional bonus of up to 5%.
If you’re saving for something where using a debit card is impractical, such as a down payment on a home, you can elect to receive your SmartyPig balance in the form of a check at no extra charge.
Children cannot open SmartyPig savings accounts on their own, but a parent can open an account and add a child as a co-owner. I think I may try this out with my children sometime before next Christmas. Maybe I can encourage the family to contribute SmartyPig gift cards for the kids instead of overdoing the gifts. :)
Pluses and Minuses
What I Like About Smarty Pig
- You can’t beat the interest rate.
- Their customer service is top notch. They have responded quickly to customer requests to lower fees. They had an issue about a week ago, where their system rejected transfers that were supposed to happen over a weekend, and notified members that their accounts would be charged $25 fees. On the following Monday, I received a personal email from SmartyPig’s CEO apologizing, telling me my account would not be charged, and that they were fixing the problem immediately. They also quickly put up a blog post explaining what had happened, so their customers weren’t in the dark.
- Others can pitch in towards savings goals, which makes it an appealing choice to teach children to save.
- If I know I want to buy something from a particular retailer, I can get an additional savings bonus by receiving my money as a store gift card.
- Savings are automated, so I don’t miss the money.
- The website and avatars are pretty cute!
What I Don’t Like About Smarty Pig
- It’s another account to manage. I could achieve the same thing by opening an ING sub-account.
- I can’t just transfer money back to my funding source. (yet)
SmartyPig Changes in Recent Weeks
- Friends who contribute to your SmartyPig goals are no longer charged a fee if they use their own SmartyPig funding source.
- If you need to withdraw your money by check, you are no longer charged a $25 transaction fee. It is completely free, though you do need to call customer service to request a check.
Upcoming Changes to SmartyPig
When their website is updated, their system for withdrawing your money will be fully automated. There will be no more checks, and you will be able to transfer money back to your funding source at no charge. That is a HUGE plus in my book!
Overall, I really like SmartyPig. I like the interest rate, I like the site layout, and I LOVE the customer service. Even though it’s one more account for me to manage, I think it’s worth it.
Have you tried SmartyPig yet? What do you think?
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Author
By Lynnae McCoy, on May 1, 2008
I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.
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Hey! This is a great resource. Thanks for sharing.
I have not tried it yet but I full intend to. Maybe even today! It’s like the “Christmas Club” accounts that my bank used to have only without the coupon book and the trips to the bank.
Just a note: I know the SmartyPig guys – we’re all Iowa folks. I’ve talked to them several times, lunched with them, etc. and offered a lot of input. If I can say one thing, it’s that they WILL listen to your feedback if you see something there you don’t like. They’re good people.
I started my Smarty Pig account in March to begin saving up for furnishing for our new home (just closed yesterday!). I found it easy to sign up, and although I kept the to the minimums for opening deposit ($25) and savings goal ($250), I really think it is a great way to make dedicated savings goals a reality. I have not yet asked family and friends to contribute, but I have added a widget to my blog to show our progress. I plan to take the proceeds and get a gift card at one of their retailers for the extra value once the goal is met (which I sure hope is before September, as we start moving in this month! LOL)
May well give this a try if it lets me sign up (tried to sign up for the paypal like one but the sign up was broken and never worked.) Already get your RSS and all that so, oh well.
The whole concept of SmartyPig is great – encouraging savings by setting goals. Reading your review, it looks as if it is definitely something worth exploring.
However, the high interest rate of 4.30% makes me wonder how they can provide such a high rate of return. Traditional money market funds are returning around 2% and anything coming close to 4% usually requires a long-term maturity.
If you look at the FAQ page, it says “Average Interest Yield (APY) is determined by our bank partner, West Bank. The APY may be changed without notice.” Being that the rate is provided by a bank, at a time when banks are strapped for cash, I wonder how long they can continue this high percentage.
Thanks for reviewing this for us. It seems like a great way to save.
Keep up the good work.
I started two Smarty Pig accounts a few weeks ago. I was having problems with my “short term savings” somehow morphing into coffee money or book money. This makes the money just inaccessible enough to keep my hands off it. So far I’m a big fan.
I want to sign up simply for the great rate, but the not being able to simply transfer money back to my regular bank has been a road block for me. I love to save money and earn interest I have goals but I don’t necessarily know how much a certain thing might cost and I want to be able to access my money if I need it if there’s an emergency or something.
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 $40,000 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 $40,000 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 website really works hard to hide their phone number from you….