As I mentioned on Monday
, SmartyPig slashed the rate on its savings account from 1.75% to 1.35% APY for balances up to $50K. This NYT Bucks blog post
suggests that this move is related to a change in its business model in which they will focus more to attract short-term savers who plan to use their savings to make purchases within 2 years. In those cases, SmartyPig's cash back feature will likely be a bigger selling point than high interest rates. The post provides some insights about what interest rates to expect at SmartyPig:
But from here on in, you can probably expect a rate that is competitive with other higher-yielding online banks, not one that exceeds those rates by much. Mr. Weinschenk said its partner bank, BBVA Compass, ultimately decides what to do with rates, though the Pig is “party to those discussions.” But their agreement with the bank is to maintain a top tier rate, and the bank has.