Smarty Pig Review: A Review of SmartyPig’s Online Savings Offering

December 25th, 2009 • Related • Filed Under • by admin

Smarty Pig has teamed up with West Bank to provide consumers with an innovative new way to meet their savings goals and is empowering shoppers to make large purchases without relying on credit cards. Here’s our Smarty Pig Review:

Financial author Dave Ramsey frequently says that personal finance is 80% behavior. This is especially true when it comes to savings. We all have things that want to save for, such as a new laptop or flat screen television, but most of never get around to it because we lack the discipline to make it happen. Instead we often rely on credit cards to allow us to purchase things we normally couldn’t afford, pushing us further into debt. Fortunately, SmartyPig is offering an online savings account option that understands the psychological aspects of saving. Their account will help you reach your savings goals and provide you with an excellent interest rate for doing so.

Standard online savings accounts provide consumers with a place to park their savings. The SmartyPig online savings account provides this, but it also encourages you to save for large purchases. You can use the account to save for specific goals and their website will help you develop a savings plan to meet that goal. Your savings goal can be as small as $250.00 or it can be as large as $250,000.

After you have met your savings goal, you can transfer the money to your checking account or receive the balance in the form of gift cards to a number of retailers including Amazon.com, American Airlines, Barnes and Nobel, Bed Bath and Beyond, Best Buy, Cabela’s, GameStop, GAP, Home Depot, iTunes, Jared, Kmart, Kohls, Macy’s, Overstock.com, Sandals, Sears, Staples, Toys’R’Us and Travelocity.

The benefit in going for the gift card option is that you can receive between a 2% and 12% bonus on your money. If you had a savings goal of $100 and received your payment in the form of a Macy’s gift-card, you would actually get $112 for the $100 that you saved.

Smarty Pig also lets you invite your friends and family members to contribute to your goals as gifts. You can provide a link to friends and family members that they can use to transfer money into your account as a contribution into your account.

From a savings account perspective, SmartyPig Online Savings currently offers a 2.01% APY rate of return on your money (as of January 1^st, 2010). Comparatively, ING Direct is offering a 1.30% APY interest rate on their Orange Savings Account and FNBO Direct is offering a 1.40% APY interest rate on their online savings account. SmartyPig savings accounts have no monthly fees or other account fees. Your actual savings will be placed in WestBank, which has partnered with SmartyPig to provide the account aspect of SmartyPig’s services.

Here’s how to get started saving toward your savings goals with Smarty Pig:

(1) Create an Account. Just enter in some basic information on SmartyPig’s website and provide a means to transfer funds into SmartyPig. SmartyPig’s database is safe and secure, which is verified by McAffee and TRUSTe—two leaders in computer security and online privacy. Create your account on SmartyPig.com

(2) Create Your Goals. Once you have your account setup, you can create your savings goals. Tell Smarty Pig what you want, whether it’s a new car or a dream vacation. SmartyPig provides an interactive calculator that will help you to figure out how much you need to put away to reach your goals.

(3) Begin Saving. Once your goal is in place and have a savings plan setup, it’s time to start saving. SmartyPig provides options to make additional one-time payments and allows family members to contribute to your goal as well.

(4) Meet Your Goals. Once you’ve reached your goal, you have three options to redeem your funds, including an electronic transfer back to your bank account, a SmartyPig MasterCard Debit Card or receive up to a 12% boost to your savings when redeeming with a gift card.

To conclude our Smarty Pig Review, we believe that SmartyPig provides an excellent way for consumers to save for major purchases. It probably won’t replace a standard savings account, but it does an excellent job of encouraging you to save and to meet your goals.