- August 13, 2009 • Posted by Michael Ferrari
- Change in APY
-
Dear SmartyPig Saver,
Beginning Monday, Aug. 17, we will be reducing our APY to 2.01%. Historically, we've initiated less-frequent drops so as to enable our customers to earn as much interest for the longest possible amount of time rather than knock 10 or 20 basis points off here and there. By visiting here, you'll find that we're still offering one of the top rates in the country. Add the social aspect of our system that allows friends and family help you to reach your goal, and our cash boosts of up to 6% from some of your favorite retailers and travel companies, and it is easy to see why people saving for specific goals are still, far and away, earning the most money for their money with SmartyPig.
There are still no fees. No time limitations. This is not a special for new money. And SmartyPig is not restricted to residents of only certain states. Our APY is still higher than the big boys - in most cases, much higher. And we aim to always be extremely competitive when it comes to the rate we offer.
We are doing everything in our power to make your SmartyPig experience one that is not only positive and worth sharing, but completely transparent. This is why instead of burying this change somewhere in your account summary we wanted to reach out beforehand, and why we invite you to voice your comments and/or concerns on any of our channels of communication: Twitter, Facebook, Get Satisfaction, our Blog, etc.
At the end of the day, we want for nothing more than our customers to get the best deals possible. We want to help reverse the credit-card mindset of "buy now, pay later." And we want to remain the best way to save for your wedding, family vacation, new TV, emergency fund or the future of your children. We think we are. But we cordially invite you to tell us 24 hours a day, 7 days a week your ideas on how to make SmartyPig even better.
Your using SmartyPig is greatly appreciated. And as always, good luck with your saving goals!
Sincerely,
Michael Ferrari, co-founder
mferrari(at)smartypig(dot)com
@mferrari- apy
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101 Comments | | - apy
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101 Comments
I'm definitely sad to hear about this change from SmartyPig. I was able to justify the change from 3.01 to 2.75, but you've now fallen a full percentage point behind what my credit union offers so I will probably have to end my biggest goal.
I love the service and I will still maintain some of my smaller goals, but it just no longer makes sense to carry on with a larger goal. I hope to see the rates start to go up one of these days to reward savers. Keep up the good work SmartyPig.
I joined in May, only 3 months ago and the interest rate has dropped to 67% of it's previous level(3.01). I understand that your rates are still higher than most establishments but that is a fairly sharp decline.
As cute as your site is and as clever the concept of having goal-oriented accounts, the reason I keep my money in SmartyPig is because of the interest rate.
On the 17th, you're going to be on the very bottom row of that list you linked to (only the sponsored banks will have lower rates).
At least you're still higher than ING Direct, but that list you linked has 10 options that are going to have better rates than SmartyPig in a week. :(
This drop in the rate is very disappointing. I have had the account 2 months and the interest rate has dropped about 28%.
I am also disappointed that the interest rate is falling so precipitously. There are several interest bearing checking accounts that are currently topping 4% APY. Granted there are several requirements that are necessary to maintain that interest rate.
I will be very seriously consider some of these other banks/lenders with an above market interest rate. Sorry, Smartypig.
The only thing you had going for you was the good interest rate. The whole saving for a goal thing is an interesting concept for the person who is new to a savings account, but doesn't really provide any other value to most savers. You used to be twice as high as ING, but that's no longer the case. I always want the best rate, but I can't be switching accounts every month to get 50 basis points here or there. Linking accounts and all the other nonsense involved is just not worth it. I might add that you also tie up money longer than other places like ING. The money does not clear as quickly (almost 4 days in some cases), which either means you need to invest money in your clearing process to match your competitors, or else you are making free money on my deposit for a day or two.
I left a comment this morning and it was not posted. Just in case in was misfiled, I will write again.
I just open up an account month and I now have a significant amount invested in Smarty Pig.(waiting for last transaction to clear).
Its true the bottom line I opened this account was the excellent interest rate. Now that it is close or at the banks that you linked, I'm not sure if it is worth it.
The biggest issue that I was willing to overlook for higher interest rates is that you will not allow join accounts or POD's. This can create a significant delay if my loved one getting there money if somthing happens to me.
These are my thought, it was great while it lasted and I hope you will reconsider this step reduction.
Thanks Joe
Yup, will be leaving too, credit union is higher. Is it worth it to you?
Agree with all of the comments above. Not worth the trouble of moving money around (in a delayed fashion) for peanuts
My comment was not posted as well.
I just created my account a few weeks ago, specifically because of the rate you were offering. Not worth jumping through hoops for you for the small difference from ING's rate. Oh well, back to ING it goes.
I am very disappointed that the rate is being lowered again!!!!!
also to this day I can not understand why a Electronic trans action takes 3-4 days to Post(Smarty Pig making money on my money???)
I will not leave Yet but I will be Looking around
I have only had this account for three months. In that time it has gone from 3.01 to 2.75 to 2.01. How can you justify this sharp drop? I liked your user friendly site with the goal setup, but the interest rate is what made me try you. So goodbye SmartyPig. Your trial expiration has ended for me.
I'm another disapponted saver. When you dropped .25% I still felt that you were concerned with your savers. However, a drop of .75% is totaally unjustified based on your so called goals.
Your savings accounts are now unjustifiable when other banks and credit unions offer the same or better rates, and allow any withdrawal amount, and multiple trust and pod accounts.
I will be leaving you soon.
You are still advertising 2.75% on your main page - I think that's sort of deceptive given that the interest rate will change on the next business day!
maybe you could stem the tide of defections if you provided a little transparency into how you set your rates. obviously you can't publish your exact profit margins, but you (or your banking partner) could describe the 3 or 4 factors which determine your rate. you may win over people who care primarily about rates by showing that:
A) you make less money off the funds than your competitors
B) bank rates are uniformly lower than credit union rates due to their tax-exempt status. compared to other *banks* you still come out on top.
some rational customers will leave for credit unions; the others will stay with you.
of course, providing this insight to your customers may not sense if you are planning on changing your rate-setting strategy in the future.
as an aside, you may need to introduce promotional introductory rates to encourage people to open an account (your goal-based accounts are stickier than your competitors once your customers have developed loyalty, which apparently takes more than 3 months).
No need to repeat a lot of the above. I think one writer indicated he is leaving, but there may have been many more. Suspect there will be very soon--including me.
Wow.
I recommended you to my friends:
"This is a great savings tool you should use!"
I now have to contact them and apologize.
My measly $10k will be going back to ING. Your site is too much of a hassle to put up with an extra half percentage.. at 2.75% it was worth it to jump through your hoops, but no longer.
The convenience of ING is worth the gap in the interest rate.
The drop is precipitous. 3/4 of a percentage in one shot hurts and you will likely see a large withdrawal of funds due to this.
I would like to find that credit union that Patti on August 13th @8pm is going back to. Mine is at a whopping 1/4%.As all of you smart savers are looking at this is still higher than any I have had, and they too have drop there rates over this year. WE THE SAVERS will keep going for the highest APY!!!
Dollar Savings Dirst is even worse - went from 3.5 to 1.7 currently- definitely going to be moving my balance from there - can i get a 2.5? (lol)
the hassle of getting MY money out of the account and linking account (even changing email) and now the low interest rate makes this site very much not worth it. i
I always thought it was fishy that my deposits took several days to post with Smarty Pig, but I was willing to put up with it for the high interest rate. I am taking my money and leaving.
Can't add much to what has already been stated. The drop is steep as will be the drop in good will and funds flowing out.
I, for one, am very disappointed in the severe interest rate reduction, from the previous 2.75% to the current 2.01%, one of a long series of interest rate reductions.
This hurts me greatly as a customer of SmartyPig.
In my opinion, this make SmartyPig, once a superior stand alone champion of great interest rates for the customer saving up money for their goals, now just another run of the mill bank/financial institution, offering run of the mill interest rate opportunities, with the attitude, let the customers be damned.
Oh well, SmartyPig, thanks for the memories.
Consider me a former SmartyPig customer.
less than 2 months and the rates have dropped. seems just like all the rest. a lot of work for nothing.
1) Complaining about a large jump down in interest rate percentage, all at once instead of smaller drops spread out, seems like a silly thing to complain about. Had the rate been lowered more often, you'd end up with less returns over the same period of time. I for one am thankful that the folks at SmartyPig waited as long as they possibly could to make the changes.
2) According to Bankrate.com today:
AIG is at 1.71%
E-Loan is at 1.55%
FNBO is at 1.50%
State Farm is at 1.17%
Bank Direct is at 0.1%
How in the world are you guys seriously complaining about Smarty Pig's rate
(which has a better website, with better features, unique social savings, and the ability to save for specific goals...) when their rate is so much higher than these huge (and hugely popular) conventional banks!?!?!
3) I for one... am staying with the Pig. In simplest terms, it still has some of the most competitive savings rates in the nation, it gives me features and usability which simply can't be duplicated elsewhere, they have some of the best customer service out there... and frankly, I don't think it shows much intelligence to move your money around every month because of small rate changes. SmartyPig has a history (since inception) of having some of the very best rates available, and today is no different.
After doings some research there are some regional banks that may be offering a higher rates but almost everyone is below 2.0. Even ING is only offering 1.4%... so why is smartypig so bad? Can anyone find a better rate? If so please email me I would love to know where a better place is at.
Rob
I signed up for SmartyPig because of the high interest rate, as I'm sure most people did (I signed up when it was at 2.75%... about two weeks ago). Now you're dropping it to a rate that is very close to other banks. Not cool man, not cool. I thought this whole idea seemed too good to be true, and this is confirming that notion.
I will wait on cancelling my account for a month or two to see if these comments are heeded and the interest rate is raised, but if not I'll be jumping ship with most of the people above.
Well, Ally Bank is offering 1.75% with no silly restrictions on linking accounts and withdrawing funds. That convenience is worth .26% to me.
What disappoints me the most is not that the rate dropped, but that it dropped so much. I fear that this is not merely a reflection of the economy, but the end of a promotional rate. I've experienced this time and time again: online banks having great rates initially, only to fall once they have attracted enough new money. I am longing for the opportunity to be a faithful, long-term customer. Please, Smarty Pig.
Very disappointing considering we just opened our account. Your high rate was one of your differentiating factors...I just don't think that your new rate combined with some of your above mentioned inconveniences makes you worth it. Sad.
My piggy just got punched in the gut, UGH
Anne,
That doesn't seem to be the case to me. Smartypig has always seemed to be in the top-tier of online rates, which is still true today. I would say that the 'large drop' has to do with their commitment to holding as long as possible during the down swing. Keeping the rates as high as possible for as long as possible. If they were simply 'promotional rates' they wouldn't still be in the top tier of interest rates, right?
Bottom line is that external circumstances are causing the shift downwards, and it's being felt by everyone. SmartyPig still represents one of the best places for basic savings, and an unmatched place for social savings, multi-goal savings, etc.
Wow. I also feel like the hassle/return ratio just got a little worse for me. I HATE the delay in posting to my accounts, but I too put up with it for the return.
I've asked why the delay, and I've been met with SILENCE.
So, how about it Smarty Pig? Why does it take so long to post transfers? It certainly should not. I feel like my funds become your funds for a few days. What gives? Your answer is important, right now, to many of us.
Yep the only reason I went to Smartypig was the rate, so now the hassle of money posting and withdrawals is not really worth the trouble. Will be a former customer soon. 2 drops in interest rates since I joined is really annoying......
I joined primarily for the interest rate (2.75%), but I'm staying for a couple reasons. First, the interest rate is still among the best. I expect that if Smartypig had to jump down this much, other banks have either already done it or are going to be making similar jumps. Second, some of my goals are actually for consumer goods that I will likely be able to purchase through one of Smartypig's retailers with a small percentage bump. Third, I like the social tools and goal-oriented savings concepts devised by Smartypig. And finally, the fact that I can't withdraw my money without closing out a goal is actually a plus for me. The money in my savings accounts, like the cash in my wallet, doesn't tend to stay put; forcing me to choose between my savings goal and a little quick cash is just what I need to keep my money in a smarter, interest-bearing place.
I am a little curious about the turnaround time for transferring money, though. Four days does seem a little long.
Keep up the good work, Smartypig.
By the way, I have and will continue to recommend you to friends.
very bad move. as many have already said there are now many better options with much simpler systems--this significant interest reduction along with the unexplainable (aka dubiuos practice of check kiting) long period that SP holds funds makes them less and less competitive and more underhanded than the big guys. I am moving back to ING and my credit union
I felt the goal of Smarty Pig was to help reach goals and get people away from using credit. .26% difference is not the much different when you use calculators and see what you would actually earn. I work in a credit union but use Smarty Pig since I like seeing the money grow and watching the percentage increase. Being able to adjust goals and see what amount you would need is helpful. It also helps by taking the money from an easily accessible account and making it hard to get the money.
All online accounts hold funds. ING holds 2-5 days depending on if the account is a checking or a savings account. This is to make sure the funds were there and it does take about three days (day one send out request, day two other institution receives, day three other institution sends to online account). Just because we see the withdraw doesn't mean that all of the activity has been completed.
Was just getting ready to open another SP account to save for a return in 3 years to a vacation spot we visited this summer. Got the word and was disappointed. However, I did check out the rates listed (thanks, SP) and researched my 2 credit unions and 1 bank and NONE come close to SP's reduced rate unless you're putting in $10,000 or more for 2 or 3 years. I'm keeping my money with SP expecting that when rates turn around, SP will still provide one of the best deals and programs around.
Wow, talk about complaining. I have had money with SmartyPig ever since they opened and am going to stick with them. A few places offer percentages of 2.02 or 2.4%. What people do not mention is that they usually come with restrictions or you can only make so many withdrawals or deposits within a month. Also some of the online banks don't offer auto deposits as SmartyPig does. People complain over the interest rate but for me I like SmartyPig not just for the interest but also because of the features it offers. Also, the couple days that it takes to get my money, that is a plus for me as I don't spend it then. If I have a savings account that I can just use on a whim then I would most likely end up spending it.
I get more at my bank in my savings account. You have 3 months to up it to at least 2.6% or i am walking. There is no reason for the rate to be this low. Whoever is managing the money you get from people is doing a terrible job. Higher me and we'd keep it at 2.75% at LEAST and i'd still make you money!
My comment was not posted so I write again. SP takes more days to transfer money from linking bank and interest is posted on a quarterly basis. These two tegether with the low interest make SP less competitive than other banks. I am leaving.
Come on don't be a mean pig, bring back the higher rates :)
I have accounts with both SmartyPig and ING. I've actually withdrawn the majority of my money from both banks and put it in stocks to catch the market rebound. However, that has nothing to do with interest rate reductions (which I believe were unavoidable for all banks).
I would like to give kudos to SmartyPig for the heads up on the reduction. I always hated logging into ING to find out my rate had dropped without any warning. I almost felt like they were trying to hide the drop.
I think a combination of a competitive rate (even if it is low, it is competitive) and the extra bonus you are potentially able to get depending on your withdrawal method make SmartyPig a good choice for at least a portion of your savings.
My comment didn't post.
I'm staying with SmartyPig. They've been good to me so far. ING is only 1.4%!
Agree with Kenny. I recently opened my account, but missed the fact the interest is dropping. Sorry SP, but I am closing my account, not worth the effort of moving my money around.
... on the way to ruin what you built.make a U turn.
I joined 3 months ago, and the percentage drops here are much more of what everybody else is mentioning. Also, I honestly don't see where these drops are justified. The economy is the SAME, government interest rates are the SAME, so why the CHANGE? Other than the change kudos on the service so far, but i'd like to see the rates climb to at least 2.5%...it should be at least that for a bank with little overhead and tons of people putting money in your bank!
Dear Smarty Pig,
Are you listening? How about a response to some of the excellent questions and comments that have been posted regarding the interest rate drop?
Dear Smarty Pig,
Hope your reading these messages! Going to lose lots of customers. Have two accounts drawing more and soon to have another. Was hoping this wasn't another bait and switch savings account. 2.75% to 2.01% very large drop.
I'm sure you have your reasons for doing this, but you've not responded to all the great questions on this blog. What's the point of the blog if you don't respond? I'm a little suspicious now that the higher rate you had been offering was just a promotion, not a permanent thing, and therefore you might not really be different from any other on-line bank. And if that's the case, as so many people have said, the small difference between your rate and the big boys' may not be worth the quirky functionality and delays in transfers. The transfers' delays put tens of thousands of my dollars in no-interest limbo for several days each time - and that's not worth a quarter-percent difference in interest rate. At a full percentage point, it was worth it. Now, not so much.
Note: SmartyPig is not a bank. The interest rates come from their banking partner, and are adjusted in keeping with the global interest market.
Just as an FYI, they're consistent higher than just about every single major savings bank out there... even today. Most are at 1.7% or below. SmartyPig is above 2.00%
To be more precise: according to Bankrate.com today:
SmartyPig is at 2.01%
AIG is at 1.71%
E-Loan is at 1.55%
FNBO is at 1.50%... Read More
State Farm is at 1.17%
Bank Direct is at 0.1%
If you are a high-rate hunter, SmartyPig may not be for you. But if you are a goal-oriented saver, then SP has some great benefits including social features that allow friends and family to contribute to your goals as well as boosts from retail partners.
I'm still getting a better rate than my credit union, any local banks in my area, as well as most online savings institutions. Yes, it may take a little longer to withdraw my money, but my goal is to use this for savings so that may not be a bad thing.
SP offer higher rates than some banks. But some other banks(eg. ShoreBank 2.15%) offer better rates than SP.
The SmartyPig interest rate is now comparable to other savings banks, but nothing special compared to when I joined in April. I'm definitely looking for a better rate. One other strategy I am following now is to switch my checking account from one with a nominally .2% rate to one with a 1.7% rate, which should help restore some of the interest cut by SmartyPig. It won't go all the way, though. I agree with others who criticized the steepness in the percentage in interest rate cuts since April. As we've learned in this past 12 months of financial failures, banks live and die on their customers' confidence. SmartyPig's sudden shift in operating philosophy appears to have largely torpedoed that belief, and for that they've only got themselves to blame.
Hello, Mike Ferrari here at SmartyPig. We've spent the last week tracking your questions and concerns, and I'd like to take this opportunity to respond on behalf of the team here at SmartyPig.
SmartyPig APY
SmartyPig and West Bank routinely review savings account interest rates, which are subject to a global market. Our objective is to offer competitive rates, in addition to benefits such as the social aspect of our service that allows friends and family to contribute to your goals and our cash boosts of up to 6% from top retailers and travel companies.
SmartyPig's current APY of 2.01% is among the most competitive rates in the country. For a complete list of savings rates you can click here http://www.money-rates.com/savings.htm.
SmartyPig is unlike your traditional savings account. If you are looking for a high-yield account which allows you the flexibility to move money in and out easily, SmartyPig may not be the best solution for your needs. That said if you are looking for an innovative way to save for that family vacation, a home remodel, a new car or flat-screen TV, we believe SmartyPig is the place to save.
Our goal from day one was to help people save for important goals in their life. Offer unique features that allow you to share your savings progress with friends and family, and should you choose, accept contributions that help you meet your goal. When that goal is hit, we want to offer you further rewards-providing redemption options should you choose to make a purchase with one of our retail partners.
ACH Transfer Time
As for the common question relating to SmartyPig's transaction times, SmartyPig submits ACH transfers via a third-party payment gateway. ACH transfers at SmartyPig take exactly 3 business days to clear from your bank and post into your SmartyPig account. Once the funds reach SmartyPig, interest begins to accrue. This 3 day process is standard for most banks. As explained in a recent Wall Street Journal article, "Funds transferred between two different banks or a bank and a brokerage firm aren't really sent "online" in the way we have come to expect. Instead, these large transfers move in steps. Banks have slowed down the process further to reduce the chance of fraud..." The industry calls this a "three-day good funds model" and it was designed to ensure that funds are good before banks and consumers are able to access them.
Transparency
The founders of SmartyPig want to redefine the relationship between consumers and their financial institutions. That means open lines of communication, responsiveness and transparency. We are going to be straightforward in communicating any news as it relates to your account vs. burying things in your monthly statement. This is a new way of thinking compared to many financial services companies. We don't want to be your bank, we want to be your partner, and we're here specifically to help you save for your goals, and to encourage you along the way.
As always, we welcome feedback. Thanks to those that reached out directly to me. And I personally welcome anyone to email me directly at mferrari(at)smartypig(dot)com anytime.
Thank you.
Complete list of rates:
http://www.money-rates.com/savings.htm
Wall Street Journal's discussion of ACH times:
http://online.wsj.com/article/SB122463632484157009.html
I like the Smarty Pig concept, but I'm not satisfied with the drastic cut in the interest rate over the relatively short time I've had this account. I've closed both of my goals as a result.
When all is said and done, high rates or low rates, whatever the case may be... I'd just like to say that the reason I'm staying with the pig and likely won't change for quite some time has to do with two things:
1) It works. SmartyPig has changed the way I spend money. Instead of going out and buying a widget on a credit card or getting a lower interest loan I save for that same widget and earn interest on my savings. SmartyPig makes me a better spender, a smarter investor, a wiser consumer.
2) People. Mike F. said it best a few posts ago. In an age when Banks couldn't be bigger and we're all becoming numbers, SmartyPig works differently. They take transparency, customer service, and personal-touches seriously. How many different organizations do you get to have open and transparent conversations with the founder of the company? How many banks have blogs, "Get Satisfaction" accounts, Facebook profiles, etc. and actively engage their customers on this level? With this much care and consideration?
For these reasons, and a whole host more, I'm a proud pig fan! Keep up the good work, guys!
I'll stay in SmartyPig for now, but will transfer out if the interest rate goes ANY lower. If they are hoping I'm too lazy to move my cash to an account with a better rate, I think they'll find everybody heading for the exits. And they def make money on the 4 day wait. Better accounts give you interest in those "sweep" days.
I'm with Derek. SmartyPig is a great way to save, and it's really made me change the way I think about money, and even how I think about myself when it comes to money. It's given me a sense of control and accomplishment that I didn't have before. I'm a proud pig fan as well!
"ACH Transfer Time
As for the common question relating to SmartyPig's transaction times, SmartyPig submits ACH transfers via a third-party payment gateway. ACH transfers at SmartyPig take exactly 3 business days to clear from your bank and post into your SmartyPig account. Once the funds reach SmartyPig, interest begins to accrue. This 3 day process is standard for most banks. As explained in a recent Wall Street Journal article, "Funds transferred between two different banks or a bank and a brokerage firm aren't really sent "online" in the way we have come to expect. Instead, these large transfers move in steps. Banks have slowed down the process further to reduce the chance of fraud..." The industry calls this a "three-day good funds model" and it was designed to ensure that funds are good before banks and consumers are able to access them."
Someone has the use of these funds for the 3 days, the money doesn't cease to exist while it is in transit. I could understand not making the balance available for withdrawal, which was I thought was the point of the article.
2% is still very good. All banks have reduced their rates. I'm surprised SmartyPig was able to hold 2.75% for such a long time. Question: I haven't heard any more if SmartyPig was going to allow for weekly automatic contributions to a goal, instead of just monthly. A post from a while back said they were looking into it. Will it be implemented soon? If not, why not?
Here's what I'm going to do in lieu of weekly automatic deposits: I'm going to set up four goals instead of one, with the auto-deposits coming in on the 7th, 14th, 21st, & 28th of the month. Not as clean or easy as a weekly deposit, but almost the same net effect of stretching the "pain" of saving out to be a little per week instead of a lot per month.
I'm sorry to see this change in the interest. Given that there are other banks available with smaller minimums and slightly higher interest, I am afraid that I will have to go with them for the immediate future. I no doubt that things will work out for Smarty Pig in the present, but I will just have to leave my account without any goals at this moment.
I knew it was bound to happen. That is alright though - you are still higher than my credit union. Plus, the money that I am saving (and spending) from SmartyPig is just not enought for me to walk away in the huff. The rates are just not good where ever you go. I still like SmartyPig because I know my goals are still being saved and it is not co-mingled with my brick and mortar account (I had a car emergency - that money would have been spent there had I had access to it). I got creative to fix the car for cheap and my SmartyPig goals are intact. It will be even better when I can save towards goals that I can take advantage of the partners discounts.
Thanks!
I find it funny that people comment on the interest rate dropping and ready to run off. Really? Is your money making millions to run somewhere else? Sure, I want the best interest rate too, but really for what they are across the board are you really making that much of an impact in life? Savings rates are down and credit cards rates are up. My local credit union has never announced a rate change - it just does.
My last comment - someone above mentioned Ally at 1.75% They do know that Ally was at 2% just a month ago and has dropped - yes?
I was so excited to find an innovative idea and a good interest rate. I joined and not 3 weeks later did the interest rates drop. I am disappointed ... is this bait and switch or will you possibly go up when it is doable and is that in the foreseeable future?
Perhaps Smartypig could publish a daily graph of relevant interest rates (e.g., national averages for 1-year, 18-month, 2-year cds, checking, and money-market accounts, as well as real competitors, like ING Direct), and plot it's own position relative to these so that customers can see quickly a) where the pig stands and b) how quickly it reacts to the overall market changes (i.e., how long it takes to shift down or up).
Regarding my August 27 post that says: "Here's what I'm going to do in lieu of weekly automatic deposits: I'm going to set up four goals instead of one, with the auto-deposits coming in on the 7th, 14th, 21st, & 28th of the month" I can't seem to do that. At least not from the same funding source. It seems that each funding source has only one date associated with. So if I had four goals, each with the same funding source, each would be auto-deposited on the same day. I guess I should e-mail support to see if there's a way around this.
Here is what support said, "You can do this by setting up your funding source 4 times with different withdrawal dates for each one."
Thanks to Consumerism Commentary podcast, I found this site today and decided to sign up. Some thoughts:
1. It was super simple to sign up. So far no wait for that initial ACH deposits to deal with. Bank of Internet really screwed me over by not having ACH deposits available after the first deposit. I already run a tight budget, but still found this a rewarding exercise.
2. I have a slew of dead bank accounts strewn across the internet, due to chasing rates. Looking at Bankrate.com 2%APY is second highest out of 59 entries. Rates will come and go, I give up on chasing them. A savings account will not make you rich on interest. Once I hit my 3k goals, I'll move it to Vanguard to invest it for the longer term.
3. 3 days turn around is average, if not quicker than most. Although in these days of electronic banking should be darn near instant. I did read the post above though. Just my 2cents (any interest on that?)
I had a savings goal back when SmartyPig was at the 3.02% apr mark. So I didn't mind the long, lonnnggg time it took for tranfers to complete. But now 2.01% just isn't worth it.
Congratulations. Add me to the number of users you've turned off from your site. I'll be saving somewhere else, now.
Why are all you people leaving? If you find a place where u can save at a HIGHER rate and not have to do a million and 5 things to get the high rate then u share the word, but i will stay with SmartyPig as for im not gonna move bank to bank when a rate drops.
I am yet another customer that is annoyed/considering discontinuing my patronage becuase of the sharp decline in interest rate. I started this account because of the great interest rate and the relative ease of it all. I even recommended it to several friends who started similar accounts. We're all saving for a joint vacation in the spring, but now, I look like an ass for recommending something that is so far, not worth the investment. I will be moving my money somewhere that has a better rate. SmartyPig gets a big FAIL in my book!
I like to check back every once in a while to do what I suggested in comment 70 at the beginning of Sept. So, in the spirit of informed competition, here are better rates to be found on the link published by Mr. Ferrari above:
ShoreBank Direct 2.15% (min. $1)
SFGI Direct 2.25% (min. $1)
All told, however, the pig is still a good deal.
Short-term interest rates seem to be stabilizing, as there are now a few institutions offering better interest rates than Smarty Pig. To be fair, I think Smarty Pig reduced their rates after most of the other institutions did so. But I think as a token of appreciation to their customers, it would be nice if Smarty Pig led the way with interest rate increases as the competition raises the bar.
Smartypig,
So yea this is pretty bad...
Smarty pig can do better, and as a customer I expect better. This interest rate is far below the rate of inflation and it needs to be better.
Inflation is actually quite low, at least by standard measures:
http://www.bls.gov/cpi/cpid0909.pdf
http://inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp
This is also pretty clear on what's at stake: http://en.wikipedia.org/wiki/Inflation
The concern, I think, is that with so much liquidity because of quantitative easing by the Fed, that there is a real threat of something bordering on hyper-inflation. Also, and related, there is the falling dollar, which will mean that imported things, like oil -- the price of which pretty much affects the price of everything else in the US -- will cost more in dollars, and be more expensive for us.
If you are concerned about inflation, perhaps put your money in TIPS through Treasury Direct. But until the price of money goes up (the interest rate is merely the price of money) -- and this will take time, since all those dollars the Fed is printing will have to be soaked up -- you are not going to get more than you are getting here, at least at the moment. Which is why I suggest that you regularly check the site that Mr. Ferrari suggests: http://www.money-rates.com/savings.htm. If you look at what's on offer, this is pretty good, e.g., equivalent or better than a one-year CD, since does not have the restrictions.
Finally, see here: http://bucks.blogs.nytimes.com/2009/10/29/the-best-savings-account-rates-an-ongoing-quest/
It's been about three months since the Smarty Pig rate dropped from 2.75 to 2.01%. In that time, accounts with savings rates of > 2% have almost disappeared. So everyone who complained on this blog really has nothing to complain about now. Unless they drop the Smarty Pig rate again. Then that will be disappointing, but it will be understandable.
I wonder when the APY will be going up again?
I have a GE Interest plus account. Right now you can get 2.3% for balances over $50k at GE however their accounts are not FDIC insured. Less than 15k it pays the same as Smartypig however again not insured! GE's interest rates also went down with everyone elses and it takes 3 days for transactions to clear. I like Smarty pig and my only dislike as I understand it, is I lose the interest on my savings if I do not wait until the end of each quarter to withdraw.
Again...
Somebody's making money from the little interest rate drops Smartypig has been doing. Either that or somebody is keeping their job. Either way i'm getting ripped off. Look, there should be a commitment to keeping interest rates high for the customers. THE INTEREST RATES ARE THE ONLY REASON(real reason) WE SIGN UP! Yes you're site is nice and it's good to have some creative freedom with goals, but we care about the interest rates. Why is this happening? Why are we decreasing rates? Don't just tell me it's all the economy. Sure it isn't. Does Smartypig exhaust all other options before making the consumers feel the sting of the interest rate decrease? Is there something consumers can do to help? Let us know what the real deal is.
I really can't understand comments like Ryan's, or any of the ones that some how believe that they can keep the interest rates higher with no relation to what is happenning in the rest of the world. At 2.01% it might not be the best you can locate at this place or that for this month or that month (some of the places that you might be able to use like a Credit Union where others can't), but if you look out at the real world you will see that all banks are lowering rates and this should not surprise you, and if you try to chase the "top interest rate" you will find that the one paying it changes all the time. But try comparing to say BOA or Wells Fargo! Of course it is better to compare to someone like Emigrant Direct or Dollar Savings Direct (requires $1000 min, and is now down to 1.5%). But since it seems that if you don't leave your money in for the quarter you lose the interst, then you should be comparing to a 3 month CD rate. You should be realistic and understand basically this is a banking account with the twist of maybe they/you getting some kick back from the bank/advertisers/retailers.
I for one, applaud the Pig for dropping the rate occasionally in a larger chunk. I have accounts at both ING and FNBO and they started out at about the same rate as SmartyPig, but have been steadily dropping the rate every month. It is really annoying to get yet another "update" email from a company letting me know the rate has gone down to 1.3%. Even if SmartyPig dropped their rate to 0.3%, I would keep my money here because of the customer service, the site setup, and the motivation to save that just doesn't exist anywhere else.
I laugh now because people that quoted Ally rates back in August have taken another .25% rate drop.
People sounded like they were moving ALL their money to SmartyPig JUST to use it as a savings account. That is great for SmartyPig, but I just don't see it as that was what it was intended for - it is goal oriented savings versus just a place to park your savings to get the best interest.
I was thinking about going to ING for my general savings account because they can have sub-accounts to divvy up the savings, but I will first make it a SmartyPig goal to get to the number that I want. I have CapitalOne for my savings right now - the interest is way down there so there is no complaints if SmartyPig drops. Plus, I am no Nelson Rochefeller so moving my 2 cents around really is not gaining me ANYTHING.
I can't go to any bank that requires anything more than Direct Deposit as a requirement. I have my Credit Union that I am happy with to do bill pay. I don't need a savings account that I have to have bill-pay, direct deposit, or some debit card action in order to make the interest rate. I want a savings account that I don't have to think about. Not another account that needs care and tracking to ensure I make the monthly requirements.
I agree with all the comments critical of the dropping rate. Michael, you are undermining all of the principles and ideals you purport to stand for on this site. You know, if you just made a STAND and started paying 5% no matter what, screw the markets, other banks would respond to compete with you, you'd make international news and you'd have oodles of people clamoring to open accounts with you and would be very wealthy.
I've told several people about your site previously, and now you have undercut my credibility.
You need to beat everyone's interest rate by a large margin if you are going to walk your walk and uphold the true importance and value of savings in America in this recession.
DO BETTER. NOW.
Consumer007,
Do you even realize what you are saying? If so I think I would like suggest something. Why don't you go to those friends you think your credibility is undercut with and tell them you will give them 5% for keeping their money with you, no matter if you get 2% or lower for your bank accounts, and you will prove that the US government will guarantee their money up to $250,000.
I'm sure if they believe you that lots of them would take you up on that offer, but what I'm not sure of is how you are suppose to get "very wealthy" doing it.
Not sure where people are getting the idea that you don't get accrued interest if you close a goal before you reach the end of the quarter ... I've closed a couple of goals in the middle of the quarter and have received the interest that had accrued that had not posted to your account. You just don't earn interest on that interest until the end of the quarter, when it posts.
That's really unfortunate that the interest rates are dropping so rapidly. Many people will now resort to others such as ING.
"Highest Savings Account Rates",
I'm not sure why you would think people would go to ING when ING rate is 1.20% and SmartyPig is 2.01%.
To me it's all about the interest rate and the fees/FDIC. Would love to see smartypig up their rates to 3 percent asap. Right now the 2 cents a day for each $500.00 is only acceptable because smartypig doesn't charge the normal rip-off banker fees. But your bank will get their fees charged for smartypig transfers back to the home bank.
When I look at the comments from people I wonder how lucky I have been or am more likely I'm just not willing to let banks take advantage of me. I haven't been using a local bank for years because I could get better services with no fees. I have changed many banks over the years just because of the services they provide, and if they charge fees. I have been with ETrade Bank now for many years and the only fee I have ever paid with them is a fee for a wire transfer. They will even pick up the fee for using another bank's ATM machine (since there are very few ETrade ATMs around), even though I have actually never used it. We would just go to Washington Mutual (Now Chase), which doesn't charge a fee even if you don't bank there. And also we just get cash back when using a debit card at the grocery store, which is more convenient then going to the bank and is also free. In the last 6 months I have opened a Chase Checking account since they offered $100 just to open it with direct deposit for my wife's paycheck, but the money doesn't stay there long, it gets transferred to my ETrade checking account. They also converted a Washington Mutual account I had, and that was completely free even without direct deposit so they have those kinds of checking accounts too.
Needless to say that if a bank charges me to transfer money, by ACH they are history. Had a BOA for about 6 months because my wife opened it for her direct deposit and to get some bonus, but found that if I asked for a ACH from BOA they charged a fee. If I asked ETrade to transfer the money from BOA to my ETrade account BOA didn't charge, but frankly I like Chase better and they don't charge the ACH fee, not to mention the opening bonus. So BOA is history.
Any of the local banks including Chase don't pay any interest so this is only for short term money. For long term money I have always used Internet banks that are willing to pay much better interest rates. I have a Credit Union, and at times it pays just as good as places like SmartyPig and DollarSavingsDirect, and they don't charge for ACH transfers, but they make it quite hard to do the transfer, because I have to always to confirm it by phone.
Of course you really have to ask why you are using this bank or that or SmartyPig for that matter. SmartyPig offers more then just banking and if that fits with your goals it can be a great place to save instead using credit that seems to get a lot of people in trouble.
Of course everyone would like to see the APR or at least they think they would, but I don't see how that is going to happen until the Fed increases its rate, and when that happens increased inflation will be in the mix too, so it will most likely be a zero net increase at the best.
2.01% APY is still considerably high compared to other banks...However, I would search around for best savings account rates as well.
Another good place to compare rates is: http://ratebrain.com/savings-rates. And it shows you the past rates too.
I checked out http://www.gobankingrates.com and in both places other then teaser rates, both say SmartyPig has the best rate. (And I love the 7.0% rate shown, which is only for the first $500, and .25% above that, and you have to live in the Los Angeles Area)
Chris - I agree with your statement about RateBrain.com -- cool site, i love the alerts and graphs.
It's actually surprising, after the huge drop in APY at all banks, SmartyPig still ranks among the top rates.
On the bright side, the inflation rate is around 2.25%, as of April. That's down from 2.3% in March, but up from 2.15% in February. May and June haven't been calculated yet, but those rates are probably not too far off from the 2.09% or so that SmartyPig compounds regularly, so we're probably maintaining the value of our money, which is the point of a savings account nowadays. Plus, the fact is the $100 you've put into SmartyPig last year would be worth about $98.41 now if you'd kept it in your jeans' pocket, but thanks to SmartyPig it's worth somewhere around $100.30 now - so SmartyPig is actually making you a small amount of money over the long term. That's something I haven't seen in a long time. On top of all that, there's the cash bonuses that SmartyPig gives you for certain retailers, which in conjunction with a bit of bargain shopping can really stretch your money.
Personally, I like SmartyPig for their goal-oriented savings, but the fact is that it's still a pretty good bank, or I'd just use Mint to track my goals.
Courtesy of inflationdata.com and the US Bureau of Labor Statistics' Inflation Calculator
I went to redeem a gift card for a closed goal, and you are now charging a %2.25 "processing fee"?
When did this start, and why are you doing it? The gift card with the "bump" was the only real draw.
In the past you seem to be all about "the little guy" --- but this seems to run against that.
John, we insitituted this fee a couple months ago when we switched gift card providers. The fee is not 2.25% as you indicated above. It's a flat $2.20 processing fee per order. And is the exact same fee we get charged, so we are simply passing the fee to you without mark-up.
Mike Ferrari, SmartyPig co-founder