SmartyPig Savings Account One Year Anniversary of 1.00%


1.05*%$50k-SmartyPigSmartyPig Savings
Accounts mentioned in this post. Rates as of February 27, 2017.

One year ago SmartyPig pleasantly surprised its customers with the news of a big rate hike. Its savings account rate increased from 0.70% to 1.00% APY. In addition, the $50,000 balance cap was removed. The 1.00% APY has held for the last year. I looked back at what other banks were offering one year ago. At that time there were six banks other than SmartyPig with 1%+ savings or money market accounts without balance caps. These included TIAA Direct, MyBankingDirect, UFB Direct, CIT Bank, Barclays and Acacia Federal. Out of these six, only MyBankingDirect still has a 1%+ yield (1.05% APY as of 6/20/13). Two out of these six have not only cut rates but have slashed rates. UFB Direct’s savings and money market accounts now have a rate of only 0.20% and Acacia Federal’s money market account has a top rate of only 0.35%. So it’s noteworthy that SmartyPig’s savings account continues to pay 1% APY without a balance cap.

One important thing to note about the SmartyPig interest rate is that it depends on BBVA Compass. SmartyPig is a technological platform. It has partnered with BBVA Compass to hold the deposits. According to SmartyPig’s Q&A, “Your SmartyPig account is a separate account held in your name at BBVA Compass, an FDIC insured bank”.

SmartyPig isn't a typical savings account. It's built around the savings goal concept in which you set up the amount of a goal that you want to reach at some point in the future. You then make an initial deposit and set up recurring deposits to meet that goal.

When you reach your goal or when you decide to end your goal, you can have the funds and the accrued interest transferred (via ACH) back to your external account. You can also have the funds placed in a retail gift card from a retailer partnering with SmartyPig. The nice thing about the gift card is you can receive a cash boost on your savings. Most of the boost percentages are 5% or less.

For those who just want to use SmartyPig like a regular savings account, you should be able set up goals and recurring deposits in a way that won't be too much of a hassle. One thing to note is that SmartyPig does not permit partial withdrawals back to a user’s funding source. They do offer the option of transferring money between goals in the same savings account. If you think you may need to make partial withdrawals, you should set up multiple goals.

Do you have a SmartyPig savings account? How convenient has it been for you?

Robert   |     |   Comment #1
I use SmartyPig a lot.  I currently have four goals set up.  I like the way you can set up a goal without the paperwork hassle of creating a new account each time.  I use it for "goals" that are in the 1-2 year timeframe.   My only suggestion for them would be to add a "weekly" funding option.  Currently, you can only add to your goals monthly, twice monthly, or every 14 days.
Robert   |     |   Comment #2
* you can only AUTOMATICALLY add to your goals monthly, twice monthly, or every 14 days.  You can do a manual contribution at almost any point.  Oh, and I love the 1% APY.  SmartyPig has been a rate leader since their beginning.
Jo   |     |   Comment #3
I like this method of saving money for someone like myself who doesn't have huge amounts of extra cash to set aside each month. It allows me to set aside a little bit at a time for any kind of goal I choose, and as Robert said, there's no additional paperwork for multiple accounts/goals. Just have a linked checking account and you're all set.

The other change SmartyPig did was its initial deposit requirement for each goal you set up. It once required $25.00, but now you only need $10.00. The other nice thing is if the temptation to access the money occurs, it may take a few business days before the money is available. That can act as a deterence to spend it all. Otherwise, if it's an emergency fund, it's best if the money is in a local bank or easier-to-access account. 

Just my thoughts that apply to me, and not necessarily others' situations. :-) And yeah, I DO like the fact that they've maintained that 1%, albeit a pittance compared to what it used to be.....every little bit helps.
Robert   |     |   Comment #4
Thanks!  I didn't know the initial deposit was reduced to $10.
Anonymous   |     |   Comment #5
What's the difference between SmartyPig, Mango Financial, and the soon-to-be defunct PerkStreet Financial? Is SmartyPig better than Perkstreet?
Anonymous   |     |   Comment #6
how do I set up a goal that I can easily move part of the money out when i need to use them? any suggestions?
Anonymous   |     |   Comment #7
there 2 links after creating a goal: "add new goal" and "add new savings account". What's the difference?

WorkingDaddy   |     |   Comment #8
"...'add new goal' and 'add new savings account'. What's the difference?

Yeah, it's a little confusing.  Maybe think of a "savings account" as a bucket of goals.  Behind the scene, I think (might be wrong) the IRS looks at each separate account as, well, separate accounts.  "Goals" are just a template that SmartyPig applies to each account.  I just use accounts as a way to group goals into categories of my own invention (one for annual goals, one for long-term goals, etc.)

"how do I set up a goal that I can easily move part of the money out when i need to use them? any suggestions?"

Yeah, it's not straight-forward, but the original article makes a passing reference on how to handle this:
"If you think you may need to make partial withdrawals, you should set up multiple goals."

So set up a second goal with, say, the minimum $25 in it and just let it sit.  When you want to do a partial withdrawal from your 1st goal, move funds from your 1st goal to the 2nd goal and close out (redeem) the 2nd goal.  Then create another goal to just sit and wait until you're ready for the next partial withdrawal.  Yeah, tedious.  But if you really want to do it, there ya go.

"My only suggestion for them would be to add a 'weekly' funding option."

Funds deposited to goals need to sit there for a while (I dunno, something like 7 business days) before you can close the goal.  Not ideal, but there it is.  So if there were to be weekly deposits, the goal would always be un-closeable while the most recent deposit or two goes through verification.

Nobody's complained that SmartyPig doesn't accept contributions to your goals from PayPal?  :-)  Nor lack of joint accounts?  :-)

For more questions/answers - including responses from SmartyPig - I'd like to suggest the site you find by googling: smartypig getsatisfaction
Anonymous   |     |   Comment #9
thanks for explaining, WorkingDaddy! - from Anonymous #6
WCT   |     |   Comment #10
Smartypig is easy to use and makes saving more fun and interesting than other accounts I have seen. You can use this account effectively for any type of savings... it's not just for purchases and short term savings goals. one of the things I like best is the online app which allows you to transfer money from your external checking to your smarty pig account effortlessly. Smarty pig could be a very effective savings tool for people of all ages... especially kids and young adults.
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