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Accounts mentioned in this post. Rates as of April 20, 2014

SmartyPig Savings Account Yield Increases to 1.00%

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SmartyPig

Over the last month we have seen a few internet banks raise their savings account rates. SmartyPig is the latest to hike its rate. This was published today on SmartyPig's blog:

We are excited to announce that our SmartyPig banking partner, BBVA Compass, is raising the SmartyPig.com interest rate to 1% APY for ALL customers effective June 19, 2012. Account balances both above and below $50,000 will all earn the new rate.

Thanks to the DA member WorkingDaddy who posted on this news in this forum thread.

This increased the SmartyPig yield from 0.70% to 1.00%. I'm surprised to see such a big increase especially after that December rate cut in which the yield plummeted from 1.10% to 0.70% APY.

Reason for the Rate Hike?

As I mentioned above, we have seen a few internet banks raise their savings account rates in the last few months. The competitive rates from the new internet banks may be the reason for SmartyPig's rate hike.

One thing that should be noted is that it's BBVA Compass who agreed to raise the interest rate. SmartyPig just manages the account. The deposits are controlled by BBVA Compass. In the last few months, BBVA Compass has been offering some competitive CD rates. Why are they trying to attract more deposits? Some may wonder if it may be related to the problems of its parent, BBVA, the multinational banking giant that's based in Spain. This San Antonio Business Journal looked into this potential issue, but it mostly just repeated what it was told by Compass's management:

While Bray says he can’t comment on how BBVA’s depositors and borrowers are being affected in Spain, he says BBVA continues to do well in Spain and is well-provisioned and well-capitalized.

Looking just at the U.S. bank, it appears to be financially healthy. BBVA Compass has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas ratio of 13.45% (above average) based on March 2012 data. Please refer to our financial overview of BBVA Compass for more details. The bank has been a FDIC member since 1964 (FDIC Certificate # 19048).

Will Other Banks Be Offering SmartyPig-Like Accounts?

Another interesting thing that I noticed in this SmartyPig announcement is that the SmartyPig company changed its name in February to Social Money Systems. I noticed this new name in the SmartyPig press release. It appears they're trying to attract other banks to start savings programs similar to SmartyPig. The February press release described their plans:

“We are offering the SmartyPig technology to any bank, in any country, using any currency, at a fraction of the cost and time it would take them to do it themselves,” said company President Scott McCormack. “Up to 70% of your typical bank’s customer base is not generating any revenue. We are changing that by completely replacing the standard savings account with one that includes social networking features, a state-of-­the art user interface, and additional streams of revenue.”

So we may see savings products similar to SmartyPig at other banks. They are calling this product GoalSaver. It will be interesting to see new banks offer this. The competition should be good news to savers.

SmartyPig Overview

For more information on SmartyPig, please refer to my SmartyPig savings account review.

  Tags: SmartyPig, savings account

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Comments
10 comments.
Comment #1 by Jo (anonymous) posted on
Jo
The timing on this is perfect. SmartyPig is the perfect kind of savings account for me so I can set goals, save and have it difficult to "access" my savings. After I come back from my son's wedding, I will start saving again for next year's travel plans, whatever they might be.

Christmas is coming up, so I plan to double up on how much is going in there. With a new daughter-in-law and her two young daughters, there will be more gift buying going on.

I really like the premise behind SmartyPig. The fact that I have to wait days before funds are released should I want to access my savings for nothing more than whimsical reasons, will give me time to think this through. That way, by the time the day arrives when I can close my goal, hopefully I will have lost interest and simply leave the money in there.

Apologies if I digressed. But regarding the increase in rate, I hope this is a sign for what is to come. One percent is still meager, but it still gives me the impetus to save, save, save using a number of goals.

3
Comment #3 by Paoli2 posted on
Paoli2
Jo #1:  I have never used "Smarty Pig" because I need more than 1% for my purposes.  However, I think Smarty Pig has been more important to you in just the interest rate since as you posted it gets you to "save".  Whatever is the key to get one to save is very important, imo.  Hopefully you can work up to a bit higher interest rates in the future.

1
Comment #4 by Anonymous posted on
Anonymous
Paoli2 #3:  And what do you consider a higher interest rate in today's environment?

Here where I live, it appeares the banks and credit unions have gotten together to steal the depositors money.  Ten year CDs are paying a outstanding 1.6% yield, regardless of the balance.  I be **** if I'm going to go that route for 10 years.  My 1% mm is available on demand.

1
Comment #5 by Anonymous posted on
Anonymous
#4  For me, in this environment, it has to be 2% to 2.4% if I can find it.  Ken has some listed but one has to be willing to go out at least 6 -7 years.  I cannot go out as long as 10 yrs but I may have to accept the others if I can still get them when my CDs mature.  This is the lowest CD rate environment I have ever had to deal with but I am concerned it is going to last much longer than we are being told.  I would also make sure I kept needed funds in a more liquid account for bills and emergencies so that would be where an account like Smarty Pig for 1% would come in handy.  One has to do what it takes to survive.

1
Comment #6 by Anonymous posted on
Anonymous
#5:  Obama, Bernanke & Co. are just stealing our future and that of our children.  We need to live on the principle, no money to pass on/help our children.  Not sure Roomey would be any better.  I heard the Big Companies are complaining they can't get 8% on pension funds and are falling short of funding the plans.  Bernanke just doesn't see the big picture.  Or maybe he does, and just doesn't talk about it.

1
Comment #11 by Ranger Smith (anonymous) posted on
Ranger Smith
Anon #10:

It would help if you would quit feeding the troll.

 

 

1
Comment #12 by Anonymous posted on
Anonymous
#11  If you will notice my posts, I have been trying to go days without responding to the "troll" but "it" follows me to wherever I post, and I am sick of his being able to call me names and mock me and my DD and the Deleters overlook it.  I need this blog and forum for my financial research and it is hard to ignore someone who is on here only to troll.  I apologize that I lost my self-control and responded to it.  I will try to ignore it in the future for the sake of the group.

1
Comment #14 by ctgottapee posted on
ctgottapee
also note for smarty pig
when you withdrawl funds, you can fund a gift card (big deal right?)
however most their gift cards come with a bonus percentage.

if you shop at amazon, you can earn interest, plus earn a percentage bonus, get an instant amazon gift card, and purchase with it, which amounts to giving yourself a small discount at amazon. takes a couple of extra clicks, but in todays interest rate environment, sadly its a winner if you were going to buy anyway.

keep track of which gift cards they have, and if you happen to purchase at one of those sights, do a withdrawl and get a little extra.

1