SmartyPig: A Goal-Oriented Savings Account
Published on - August 19th, 2008 (Modified on - October 29th, 2009) (by J.D. Roth) 
Have you ever wanted to pool your money with friends or family to save toward a common goal? While it’s possible to do this with paper and pencil, it’d be easier if there were an online service to automagically track the savings for you. SmartyPig believes it is that service.
SmartyPig is a special branded savings account from new type of savings account, with funds held at West Bank of Iowa. It’s specifically created to foster goal-oriented savings. From the site’s promotional material:
SmartyPig is a unique savings program that was designed to help you save for specific savings goals. Goals are funded with a required monthly recurring contribution from your existing checking or savings account. You can also make additional one time adds of money to your goals and receive contributions from your friends and family members. SmartyPig is unlike any other savings account!
You might, for example, use SmartyPig in the following ways:
- Your brother could open an account to which family members could contribute as he prepares for the arrival of his first child.
- You and your girlfriends could share an account to save for a cruise next summer.
- You and your wife could set saving targets for remodeling the house.
- You could create your own private account in which you save for a new car.
SmartyPig promises that it is secure as any other online savings account. Deposits are FDIC insured. Best of all, the account currently offers 3.90% APY!
I haven’t used SmartyPig myself, but it sounds like an interesting way to save for goals. I’ll probably stick with my ING Direct subaccounts for now, but I’d love to hear from GRS readers who may have used SmartyPig for the last few months. Do you like it? Would you recommend it to others?
GRS is committed to helping our readers save and achieve your financial goals.Savings interest rates may be low, but that’s all the more reason to shop for the best rate.Find the highest savings interest rate from Ally Bank, Capital One 360, Everbank, and more.
This article is about Budgeting, Money Hacks, Tools
Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.
Discover is a paid advertiser of this site. Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.
SEARCH FOR RECENT ARTICLES
The interest is nice, and so is the goal-oriented savings but I seem to remember that there is a fee every time someone contributes to your fund. Fail.
loading....
It’s pretty cool. I was afraid I’d lose my SmartyPig debit card and lose the hundreds of dollars I had saved for new electronics. The interest may be high, but it won’t amount to much each month. I’d rather just add money to my regular savings account and get interest deposits of $20 each month.
loading....
Thanks for the tip!
I prefer the ING sub accounts also. It’s great how you can create a sub account on the spot and provide a descriptive name. The down size, which isn’t huge, is a checking draft only shows ING rather than your sub account name. The feature to hold accounts in a living trust is also very nice (and simple).
DSR
loading....
I wish I had known about this months ago, when I got married. We purposefully didn’t register anyway because we wanted to receive cash to put towards our new home. An account like this would have been perfect. We could have sent out info on the account with the invitations. I did some research on this type of thing back at the beginning of this year, but couldn’t find anything like it. I think it is an awesome idea, there should be more out there.
loading....
I was all set to start an account only to find that they only allow US citizens or green card holders to start one.
Just thought I’d leave a comment here in case any other non-permanent residents wanted to try starting an account.
loading....
I’ve been using it for a couple of months now.
Pros:
– If you redeem as a gift card from somewhere, you get a nice little increase.
– You can open multiple accounts.
Cons:
– You have to take out your entire “goal”‘s worth of money, which is a minimum of $250. So you can’t just pull out $50 if you need it.
– Interest is paid daily, but only gets increased monthly, and only paid out quarterly.
– Transactions are *slow* . . . almost a week, so you might actually lose money by transferring out of INGDirect or something, even with it being a lower interest rate, because of the missed days in between.
Overall, it’s fun to play with, but not as quick and easy as a “regular” savings account.
loading....
Kristin wrote: “We could have sent out info on the account with the invitations.”
And all your guests would have been talking about your bad manners in doing so.
loading....
J.D. Thanks for the post! Just wanted to clear one thing up: funds are held in West Bank but we are not a branded West Bank account. As for your ING sub accounts, your friends can’t help you out using ING! And if you have a social network page, you can’t put an ING widget there to help them find your goals and contribute! In all seriousness, though, really appreciate it. @Anca, if you lose your debit card, you can get a new one, you can even reload your debit card over and over again with funds from other goals. @Kristen, we have tons of customers who are using SP in instead of traditional gift registry – for weddings, babies, etc. -Jon Gaskell, SmartyPig Co-Founder
loading....
This is a very interesting concept. You really can’t beat the interest rate.
One factor that might not make it worth it is if your regular credit card gives you reward points.
You need to compare the two and see what gives the most benefit.
loading....
I’ve read a few posts on it, and I think it’s a very interesting concept; but I would never use it. I think it would come across as begging, the only reason I could imagine using it is for a wedding, in which I think it’s a great idea…especially if it takes into account who gave you the funds. Too bad I’m already married.
loading....
Thanks for the info. I just opened an account to buy a “group gift” for my hubby. He’s been eyeing a Japanese made, custom taylored gi (karate uniform) that is WAY out of my budget, but I know his mom and sisters would “go in on it” with me. SP seems like a good tool for that use…
loading....
Interesting idea, but what’s the benefit if the person being gifted (or whatever) can withdraw only the entire amount contracted for? Am I understanding that right from Jason’s comment?
What if more than the desired sum is deposited? Is the overrun just forfeited to SmartyPig? What if people never do deposit enough to add up to the desired amount? Then what happens to the money — is it returned to the donors…or what? If the interest accrues monthly and is paid out quarterly, what if you reach your goal in, say, six weeks? Do you ever see the interest on it?
If the number of people involved are few and they trust each other, wouldn’t it be better to open a single joint savings account in a bank or credit union with all their names on it, so they can all make electronic deposits? That’s what my son and I are going to do. Seems simpler than dealing with a virtual bank where you likely can’t reach a human being.
loading....
I have been doing this (without using SmartyPig of course) with my WAMU online savings and HSBC online savings account for the past 2 years. My plasma screen TV, lazyboy furniture and high fidelity sound system are proof enough that this concept works.
loading....
Thanks, Jon Gaskell. I’ve made corrections to the post.
loading....
My best friend and I have a joint account at ING to save up for a girls’ trip to Paris when I turn 50 (June 2010). We have almost $2500 saved up by contributing $50 each per month. This was very easy to set up, and it’s how I got started at ING.
loading....
I too was going to give the SP option on my wedding invites – however, I was never able to log in to the account as I never received a password – nor follow up from the company. I am glad to see the ING references on here as I have been hearing good things! Thanks posters!
loading....
I’ll repeat this for tt: giving any information about gifts you want to receive for your wedding or where you are registered on an invitation is tacky, tacky, tacky. You don’t invite someone to your wedding to get gifts. Time to read some etiquette books people.
loading....
i understand it’s classic etiquette, but i had several people complain to my mother and i that i did NOT include registry info on my invites. so, fyi, the old standards are changing.
loading....
Barb1954: I don’t find this any more tacky then telling people where you’re registered for gifts. Placing something like “For monetary gift I would please ask you to go to XXXXX and not bring cash in an envelope, Thank you” would not really be tacky… I actually know of a copy weddings where money in cards has been stolen by someone at the wedding (including the mother in law taking a huge handful “because of the large contributions she made to arranging the wedding”). So I know I would be more comfortable having an account like this or even saying pay pal me the money.
loading....
For “Funny About Money”:
Yes, you can withdraw only the entire amount that has been deposited (no less). If more than the desired sum is deposited, that’s okay. It just sits in there, gathering interest along with the rest, but it’s part of the full amount you have to withdraw.
If people never deposit enough to add to the desired amount, you should be able to close the “goal” at any point, but you must withdraw the entire amount of money, along with the interest that has accrued so far.
I agree that it’s probably simpler to open a joint account, but you can only do that with so many people–this way co-workers, other family, friends, etc., can contribute to a “goal.”
There are some other tricks I’ve learned to make it work the way I want, but it took a little learning.
loading....
For those who want to know more, here are a couple references about wedding invitations and mentioning anything about gifts on the invitations, which is a big no-no:
http://www.weddingchannel.com/ui/buildArticle.action?assetUID=2809
http://www.frugalbride.com/dosanddonts.html
http://ww22.1800flowers.com/template.do?id=template8&page=4016
http://wedding.theknot.com/wedding-questions/wedding-invitation-questions/qa/should-we-include-registry-on-invitations.aspx
http://www.einvite.com/info/wedding-etiquette/wording-invitation/?Cobrand=eInvite&Site=eInvite&vk=1777211146
loading....
I’m with Barb1954 here. It is rude, rude, rude to include information about gifts with a wedding invitation, whether it’s cards for a gift registry or information about an account. If you know someone well enough to ask them to your wedding, they’ll know how to contact you or your family members about where you’re registered, assuming they want to buy off a registry or give you money, which is of course their choice. But demanding gifts by putting that information with a wedding invitation is the definition of tacky. And no one ever gets to decide what other people are going to give them, let alone when or how. The fact that people might steal cash is no excuse to be rude (although it does suggest more caution with the guest list is warranted).
I can’t believe there are people who think that adding gift information (of any kind) to a wedding invitation is reasonable. Or any kind of invitation, frankly; we registered for our recent baby shower, but that information certainly wasn’t included with the invitation. My friends who’ve had baby showers: ditto. And yet everyone managed to figure out the registries.
loading....
While I wouldn’t include the info ON the invitation, I don’t think including it WITH the invitation as an insert would be unwarranted. Here’s why: The registry is a service for the guests. Why would one purposefully exclude that information, forcing the guests to contact either the marrying couple or another guest to get the information? THAT seems truly rude. One would never purposely exclude a map to the location and force your guests to get directions! Plus, it can make for a point of gossip, as “who had to use the registry” as opposed to gifting something more personal.
Of course, this is seems like a standard fight between traditionalists and others. A sort of accepted compromise seems to be creating a website for the wedding, and including THAT with the invitations. Then on the website, along with other information, you can include information about gifts and registries.
loading....
I don’t think at a registry is inappropriate. It’s just too old fashioned a notion – it’s like saying that we are all being rude for not wearing white gloves to the reception.
A registry is supposed to HELP your guests out. Why keep it a secret?
I DO however, feel that putting things like “instead of gifts the couple would like cash” is EXTREMELY tacky. At least a registry gives you suggestions of what they might like to help offset multiple toasters and the like. Even if it is saving up for a house – this is your personal financial situation you are throwing out there and it says a lot about you.
I also think it’s really rude to sign up for a registry and have everything on it be more than $50. Really? $50 for a towel? $70 for one knife? I know that there should be a handful of more expensive things, but there is going to be one sad bride and groom out there coming home to 2 bath towels, 2 hand towels and 1 wash cloth that FOUR of their friends had to chip in to buy!! (True story! Those 5 things came out to $115!!)
Heck – why not charge a cover at the door?
loading....
Hey, in Japan, they do charge at the door! (I got that from a book, not personal experience).
As a guest of many weddings, I *appreciate* having registry info right in the invitation. Then I don’t have to run around the (virtual) world looking for the right store. Even though I know my mom would think its tacky, I’m all for the SP deal as a registry. Or for a high-school graduation – that would be great!
loading....
Sorry guys, the registry is not a service for your guests because your guests are under no obligation to bring any gift at all and registries give the impression of “since I know you’re buying something for MEMEME… get it here”
That’s why it’s tacky. It’s tacky too present yourself as entitled to gifts from anyone. The gracious thing to do if you’re going to register (and I think SmartyPig is a fine idea for a registry! Just not on/in invitations) is to let your families and the wedding party know where you are registered and the word will get out without either bride or groom having to say “oh and hey, since I know you’re going to drop a bunch of cash on me… do it here”
It might be old fashioned, in fact it definitely is, but it’s far more tasteful than behaving like a child on her birthday.
On Topic: SmartyPig sounds interesting but complicated. I’d rather do sub-accounts on ING also, even if people can’t donate to it, I like to keep my money where I can understand what’s going on.
loading....
I’m sorry, but I’ve seen countless invitations for baby showers and weddings that include registry information. For a wedding it’s not on the main invitation, but it’s on an insert, just like directions are on a separate insert, and the RSVP card is another insert. For baby showers, it’s always included on the main invitation.
Another thing – if you’re going to a wedding – people expect you to bring a gift. It’s not tacky, it’s society. People say it’s rude to say anything about a registry, but it’s also rude to go eat a four course meal, get a wedding gift for attending, and be entertained for several hours and not bring a gift. It’s a fact of life that you bring a gift to a wedding. People may not think that’s “right,” but it’s kind of the way it is. Now, the great thing about Smarty Pig is if guests are on a budget and can only afford to give, say $10, then it’s a lot nicer to just donate and say “I donated to your Smarty Pig” rather than give them something cheap that they might now use.
There are also lots of couples who put, along with the invitation, something like “in lieu of gifts, please donate to so-and-so charity.” No one ever thinks that’s tacky. What’s so different about giving SP info?
loading....
hmmm… well I’d like to apologize for coming off as prissy or sanctimonious regarding wedding gift etiquette, I certianly would not like to give off that impression.
Anyone is of course free to do as they will for their wedding. I would not put a registry on the invitation because I want people to come to my wedding to celebrate my happiness not feel obligated to buy anything for me. If there is an alternate point of view that works for someone else there’s nothing wrong with that in the least.
However, it is traditionally accepted that including any reference to gifts-including cash gifts, charitable gifts, or a gift registry-on or in an invitation is incorrect. Times change and perhaps this is a Jurassic custom, but there is a reason people have thought that way for a very very long time. Miss Manners is a great resource for questions like this btw, and you can read many portions of her books on google books.
Sincerest regrets for derailing the thread.
loading....
Hey folks. Tiffany here at SmartyPig. Great questions and comments.
@Funny about Money, SmartyPig has been designed to help people save for specific
purposes. With that in mind, when you want to redeem your funds, you must
close a goal. You can, however, have multiple goals open. Once you reach
your goal, your monthly contribution stops but you continue to be able to
add funds and earn interest until you decide to close your goal. If you
close your goal prior to the end of the quarter, interest is paid up to the
time you close your goal.
@tt, Am sorry that you did not hear back about your password. The number for customer support is 888-567-6278; feel free
to ask for me directly.
@Jason Scott, ACH contributions typically take three days to clear into your SmartyPig goal and credit card contributions post as
soon as the next day.
Thanks again for the opportunity to post this reply. If you have any questions, please feel free to email me anytime at support (at) smartypig.com.
loading....
Wow!
Sounds like a great idea, except for the part about the fees.
Maybe credit unions will start something similar in the future.
My family have been with http://www.tropicalfcu.org forever because they have convenient online banking and practically no fees – even overdrafts!
loading....
I have a smarty pig account and I love it. I am specifically saving for a trip abroad and have over half saved. My initial investment was a $50 SP card I won over at Gather Little by Little and I haven’t stopped saving since. I will be able to take the ‘credit card’ and buy my airfare, hotel/hostels and whatever else I need or want when I go.
I do not have my account set up for others to be able to contribute so I can’t comment on that part of it, but in general, I am happy with it.
loading....
I’ve used Smarty Pig for about 4 months now and overall I really like it.
+Fast, easy to use, and set up
+GREAT customer service. I wanted to deposit a large amount and it wouldn’t let me do it online, so I called and got to talk to someone and they called me back with an answer too. Pretty cool.
+Good interest rate.
+Bonus bump with the partner retailers.
+/- Not easy to withdraw money.
+/- The laughs I get when I tell people I use it. hehe I like the name and I think it is so cute.
-Takes sooooo long to get the $ there. It feels like a week. And the $ is taken out of your account before it posts to SP so the middle days your $ isn’t earning interest.
Overall really good and I’d recommend it. To me, it seems like it really is for two things. 1. Long term savings and 2. Saving for goals.
(As opposed to saving $ for the heck of it and using it as overdraft protection…or spare disposable income to spend.)
I’d write more but I think I made my point.
loading....
I tried to open an account with them but ran into a problem.
I have frozen my credit profile because of an accidental leak of some personal data about a year ago. I have two credit cards and don’t need any others, so to be on the safe side I put a lock on my credit profile and thought no more of it.
When I went to open an account with smartypig (and other banks too, to confirm what I was seeing) they all told me I couldn’t open a savings account with them because my credit profile was locked! What the hey? What does my credit profile have to do with a savings account? Where does “credit” enter into the equation? Surely a savings account is a straight-up transaction…I open an account and send them a cheque for X amount. They put X dollars in my smartypig account and we’re done, right? Why do they want my credit profile?
I feel like I’m being punished simply for being safe and cautious with my credit profile. It would cost me $30 to temporarily lift the freeze in order to let them check (and that’s too much), but as I said before, why do they need to see it?
loading....
2.9% processing fees per transaction? No thanks.
loading....
Hi everyone. Tiffany at SmartyPig again. Have been reading your responses and would like to clarify a couple of points:
@Cathy and @Mikhaila Clements, SmartyPig is completely free. The 2.9% fee is only for non-users giving gifts via credit card and is the same rate as PayPal for credit card transactions. There is no charge to open, contribute or close a SmartyPig account, as they are free to users.
@Brian Smith, SmartyPig takes security very seriously. If you would like to open a SmartyPig goal, you can always temporarily lift the freeze on your credit file and apply at that time. If you have any questions about how to do this, please feel free to contact me at support (at) smartypig.com.
Thanks!
loading....
Hi Tiffany, and thanks for your reply. I’m sure your company takes security very seriously, as I’m sure any bank would, but why does that mean checking my credit history? Why am I being kept from opening a savings account simply because I have taken steps to protect my credit history? Shouldn’t there be an alternate method for verifying whatever it is that you need to verify?
I realize this is not just SmartyPig’s policy, but any other bank would do this too: I just don’t understand why.
loading....
I found Smarty Pig a few months ago just by Google-ing “savings rates” and Smarty Pig had the highest rate. When I checked out the site, it said it was Free, had 3.9% rate and FDIC insured. Who can say no to that. I closed my ING accounts – not even my CD could get that high of a rate. I anyone is complaining about trying to get money in or out – it takes a few days anywhere you go. This is not a normal ATM, it’s for SAVING money, not withdrawing everytime you need cash. I love that it calculates your monthly contribution to your savings goal. I tell all of my friends about it – it’s the best thing since ING!
loading....
@Brian Smith… I don’t know, but I expect they want to see your credit history because it’s an approved form of identification for you. ie – they’re using it to verify you’re who you say you are.
loading....
@Brian Smith…First of all, my apologies for not seeing your question sooner. Not quite sure how, but I missed your question until today. @Smantha, you are correct, we use the credit report as a form of identification when we cannot confirm the user’s identity through our other processes. While we typically do not have to make a hard pull on the applicant’s credit file, there are situations where this is the only way we can complete the industry regulated verification process.
Thanks to everyone for you questions and comments. As the head of compliance, I would love to address any other questions you may have. You can reach me directly at tbrewer (at) smartypig (dot) com. You can also check out what The Consumerist had to say about us earlier this week at http://consumerist.com/tag/smartypig/.
loading....
Thanks for the reply, Tiffany, and the advice (Samantha), but I’m still not convinced that my credit record establishes my identity, nor that you NEED to establish my identity.
If I say I’m George Washington and give the correct SSN, address,date of birth etc, then seeing his credit record does nothing to establish that I (me sitting at the keyboard) AM George Washington. It just proves I know his personal details. I can’t think of a scenario whereby you can truly verify who I am without me being there in person: any question answered electronically could be answered correctly by someone who’d stolen my identity.
My guess is that the scenario you’re trying to avoid is if someone steals my chequebook and tries to open another account somewhere in order to transfer all my money out, then cash it out. I don’t see how accessing my credit profile would help prevent that, unless you called me (on an old phone number, not a new one, of course!) to see if I can quickly and verbally verify obscure aspects of my credit report.
It’s all academic, I know, but I was able to open a CD at Zionsbank without any problems. I like keeping my credit profile frozen and will only work with businesses that don’t see that as a problem.
Thank you for being here to answer these questions, though, it’s very nice to see this happening.
loading....
Hi,
I am a resident alien and would be in US for next 5-6 years. I am authorised to work in US. Can I open a account with Smartypig?
loading....
@Kaushal Thank you for posting your question. To answer your question, I have to ask one back. Do you have a tax id number? If so, you will be able to go through the registration process using that information. If you do not have a tax id number, we will not be able to verify your identity, so we will not be able to open your account at this time. Please feel free to contact me directly at tbrewer(at)smartypig(dot)com if you have any other questions. Thanks, Tiffany
loading....
Yes, I have a valid SSN, which is a tax-id too.
loading....
How does SmartyPig manage to pay such a high interest rate of 3.9% APR when all other online savings accounts are paying only 2.5% APR. Is this just an introductory offer.
loading....
@Amit
Thank you for your post. SmartyPig’s APY as of 1/2/09 has been changed to 3.25%. While the interest rate is subject to change at any time, SmartyPig will strive to always remain competitive. Our APY is set by West Bank, our banking partner. Please feel free to contact me directly if you have any further questions at support(at)smartypig(dot)com.
Thanks, Tiffany
loading....
Thank You Tiffany. I appreciate your response. I have opened the account at SmartyPig yesterday.
loading....
I’ve been using SmartyPig for about two months now, and overall I’m happy with my service. I’ve been the only one depositing any money in the account, so I’m not sure how well it works with a multiple depositors. As an individual account, though, it works nicely: the interest is wonderful (3.25% vs. ING’s 2.2% and HSBC’s 2.4%, currently), I haven’t had any problems with service, and the selection of tools is quite helpful.
I do have a few quibbles, though. First, it’d be nice to choose how much money to put into the account each month, rather than having to finagle the savings goal total or end date to get an amount near what you’d like to contribute. Second, it’d also be nice to simply end contributions to a savings goal and keep the money in place (earning aforementioned high interest rate). Unless I’ve missed something, there’s no way to do either of these things, which limits the ease of using SmartyPig as, well, a virtual piggie bank.
loading....
@Roger Thank you for your post. Glad to hear that you have enjoyed using SmartyPig as a way to save. You ask a couple great questions, and ones that we have heard from a few users now. We are currently looking into letting users set their monthly contribution by amount rather than with the goal calculator as a possible future site enhancement.
As for your second questions, your monthly contributions stop once you reach your goal. At this point you will continue to earn interest on your funds and can make one time contributions using the Add Money feature, but your monthly contributions will no longer automatically draft. Thanks again for your post and feel free to contact me directly at support(at)smartypig(dot)com.
Thanks, Tiffany
loading....
You really can’t beat their APR. My wife and I recently started using SmartyPig. We have one goal account for a trip to Japan, and another one to cover expenses for when we start our family (set to a goal of $2000 with a one-year time period – every year, we’ll reinvest the money from it for another year, that way we can potentially save 10s of thousands of dollars without having to lock away our money for decades at a time). We have only started recently, so I’ll have to see how it goes.
loading....
Just to let everyone know the rate is 3.05%! I am unable to find this kind of interest anywhere else.
loading....