You may have heard of a new personal financial site known as SmartyPig, but what is it?
SmartyPig was created in 2008 as an online site to help individuals save money for a specific goal. Think of SmartyPig as an online piggybank that pays a high interest rate. You can save for anything on SmartyPig including a wedding, a vacation, or a down payment on a home.
SmartyPig defines itself as “a simple, smart and secure way to save for a specific goal.” The unique aspect of the site is that SmartyPig lets friends, family members, and other users contribute to your savings goal. You can also contribute to other people’s savings accounts to help them achieve their goals.
Imagine that you are trying to save $2,000 for a 70 inch flat-screen television, and you log into your SmartyPig account to find out that your friends have donated $200 towards your goal. Wouldn’t that put a smile on your face? SmartyPig lets you do the same thing for someone else. You can contribute money to help them reach their goal.
Let’s say you want to withdraw your $2,000 savings from SmartyPig. If you withdraw your savings out on a Macy’s gift card, SmartyPig will give you a cash boost of 12%. That’s a $240 dollar bonus on your account. See the full list of best-in-class retailers offering a cash boost. There are quite a few including Macy’s, Best Buy, Amazon.com, iTunes, KMart, and more.
Opening a SmartyPig account is as easy as 1-2-3. Here’s how it works:
1. Complete the account application.
You need the following information to open an account:
- Driver’s license number or state issued ID
- Social security number
- Home address
- E-mail address
- Date of birth
- Phone number
2. Set up your savings goals.
You can save any amount from a minimum of $25 to a maximum of $250,000, for any purpose.
3. Fund your account.
You can fund your account with any existing checking or savings account. Just link your existing checking or savings account to your SmartyPig account.
SmartyPig’s Key Features
- Gives you the ability to set up as many personal and family goals as you want.
- Offers a variety of options to achieve your goals.
- Allows you to add additional money to your goal at any time.
- Share your goals with your family and friends.
- Provides tracking tools that let you check your savings progress.
- Enables you to consolidate your savings account to one place.
- Funds can be redeemed via a debit card, bank account transfer or placed on a retail card.
- Access your account anywhere, anytime using your cell phone.
- Savings account can be integrated into other money management sites.
- Contributions can be made to other user’s accounts to help them meet their goals.
- Opening, funding, and withdrawing money from your SmartyPig account is always free.
- The interest rate is much higher than interest paid at traditional banks and many online banks. (APY is currently 2.01%)
- Interest is compounded daily which allows you to earn more money.
- Automatic contributions makes saving easier.
- Accounts are FDIC insured up to $250,000.
- Low minimum to open an account. (The account minimum is just $25).
- Earn an additional 12% if savings account money is transferred to a retail card.
- Tracking Account Visualizer takes the guesswork out of savings.
- Gift cards can be given to anyone that you would like to help start saving.
- It costs 2.9% to make a contribution to another user’s account.
- Credit cards can be used to fund savings account contributions.
- A checking or savings account is needed to fund your SmartyPig account.
SmartyPig is not a bank. All SmartyPig savings accounts are held at West Bank and insured by the FDIC up to $250,000 per account. Michael Ferrari and Jon Gaskell started SmartyPig so that individuals could automatically save for their goals and allow others to help them reach their goals.
I love the fact that SmartyPig lets you share information with other users about your goals. SmartyPig allows you to let your whole social network know about your goals using Facebook, MySpace, Twitter or email. Accountability makes it a lot more likely that you will stick to your financial goals. The extra support from other users should keep you motivated to reach your savings goals. SmartyPig is the only site that I am aware of that offers the ability for friends and family to contribute to your savings goals. The cash boost incentives are also nice for those people looking to save for a specific item that they can buy from one of SmartyPig’s preferred retail stores.
Overall, SmartyPig is a great product for those of you that want to set up specific savings goals and be transparent about it with your friends and family.