SmartyPig emailed its customers about an upcoming rate cut. Its savings account APY will be falling from 1.35% to 1.10% effective June 15th. I just confirmed this by calling SmartyPig. Everything else remains the same. Here's the contents of the short email:
Effective June 15, 2011, the interest rate paid on SmartyPig savings accounts will be adjusted.
The interest rate earned on balances* $0.00 - $50,000.00 will earn 1.095% (1.10% APY). The interest rate earned on balances* above $50,000.00 will earn 0.499% (0.50% APY). *Balances: For purposes of calculating balances for determination of the rate tier that applies, total balances of all goals within your SmartyPig profile will be aggregated.
Currently, there's no mention of this rate cut at SmartyPig's website or at its blog. The SmartyPig CEO used to openly write about the rate cuts at the SmartyPig blog. The last time this happened was in September. At least they sent an email before the rate cut. In January SmartyPig slashed the rate without any notification.
Last year SmartyPig changed its bank partner from West Bank to BBVA Compass. That change hasn't helped savers. It seems BBVA Compass has no intention of being a rate leader. This NYTimes Bucks blog post looked into this issue. It suggested that SmartyPig wants to focus on small savers who will use their savings to make purchases in SmartyPig's Retailer Gift Card program.