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April 19, 2010 • Posted by Bob Weinschenk

We’re Raising Rates!

The average online savings rate dropped more than 1% in the past year while the average credit card interest rate rose more than 1% in the past six months – costing consumers hundreds if not thousands of dollars. We here at SmartyPig feel it is high time to take care of the people who are trying hard to save and spend smarter rather than gouge them like everyone else. With the average interest rates on credit cards reaching 14.26% in February and poised to leap to 16-17% by fall, how can we not?

On May 19, 2010, the APY on balances* of less than $50,000 will go up to 2.15%, while balances* of $50,000 or more will see a rate decrease to 0.50% APY. This tiered structure will greatly benefit more than 95% of our customers who are working hard towards their goals and using our redemption program to earn even more cash when they reach those goals. While a small portion of our users will see a rate decrease based on their limited use of the service, we feel strongly that our mission will greatly benefit our core customers who are saving for various milestones in their everyday lives.

See, when we recently went over some ideas with a few of our customers, what we overwhelmingly heard was this: Help the people who use SmartyPig the way it was designed – everyday people with everyday needs and wants – by giving them a higher rate, more cash incentives and the royal treatment usually reserved for high-balance customers at big banks who typically crush young, working people with fees and gimmicks while lending a deaf ear.

SmartyPig would be nothing without these folks. We applaud them for wanting to change for the better and having the courage as well as the resolve to make it happen. We are going to work as hard as you to help you get to where you want to go and make sure you stay there.

Please let me know at any time how we can be of service or how we can make an even better SmartyPig. Your continued support is greatly appreciated and, as always, best of luck with your goals!

For additional information, please click here to read the complete press release.

Oh and one more thing: The only time we ever make money is when our customers make money. With our decision to focus on our goal-oriented customers, we hope to help you earn even more.

Bob Weinschenk, CEO
bob@smartypig.com

*Balances: For purposes of calculating balances for determination of the rate tier that applies, total balances of all goals within your SmartyPig profile will be aggregated.

**** UPDATE by Bob Weinschenk – April 19, 2010: 10:20 pm CST ****

I’d like to thank everyone who took the time to post on our blog. All comments are appreciated and help us create a better product.

To clarify, there was no intent to spin a bad story (the rate decrease for deposits over $50K) into a positive (the rate increase for deposits under $50K).  We made a change that positively affected 95+% of our customers and stated the truth. To the 5% of our customers who could experience a rate decrease (if deposits are not brought below $50K) in no way shape or form was there an intention to miscommunicate the facts. Also, we truly hope to keep your business.  We are just unable to pay above market interest rates for balances above $50K. We hope you will maintain a balance of under $50K, enjoy our industry leading rates, and further use our vendor redemption programs to receive cash boosts of up to 12%.

I’ve received a number of requests for the rationale behind our decision today and felt it appropriate to address it further here:

We live in a multi-tiered interest rate world.  The base of this tier is called Fed Funds.  This is the interest rate at which private depository institutions (mostly banks) lend balances to other depository institutions, usually overnight.  Another way to look at this – it’s the interest rate banks charge each other for loans.  Today the Fed Funds rate sits at 25 basis points (bps) or 0.25%.  Consider this to be the base interest rate. SmartyPig lives just above this rate (We are not a CD, for example; our customers can take their money out at any time without penalty) and hence our banking partners are limited by state and federal regulation as to how these funds can be invested or loaned out. So here’s the math – we were paying 2.01% and could get between 0.5% and 0.75% for our deposits. Any difference comes at a cost.

So how does SmartyPig make money?  I can assure you that SmartyPig has never made any money on our customers’ deposits.  We make our money through our redemption program.  Our customers get cash back boosts of up to 12% and we get a marketing fee for the transaction – it’s that simple.  We can use some of this marketing fee to boost interest rate for our customers, which is what we’ve chosen to do on an across the board basis up until now.

We’ve learned two things after the past 24 months of operation. First, 95% of our customers have deposits below $35K and second these customers tend to use our redemption program. These two facts were the reason behind the decision we made. Like you, I have a goal, as well – mine is to grow SmartyPig and provide our core customers with the best product possible. It wouldn’t be possible without this change.

Thanks,
Bob
bob@smartypig.com

  • Kelsey

    I am thrilled that you are raising rates! I can’t wait to put more money in my smartypig account. This is the best decision I have ever made for saving! Thanks SmartyPig!

  • Beth

    WooHoo! Thanks, SmartyPig. My ING rate just dropped again (down to 1.015, I think) so this is just the incentive I need to put all my savings in SP. I really appreciate how you listen to your customers, and then ACT on those suggestions! Keep up the good work.

  • Jessica

    1) Awesome – a company that actually is giving bonuses to its smallest customers!
    2) Now it’s actually worth me adding new goals — before you were below the rates of my credit union.

  • http://www.reallifeadvice.wordpress.com Adalia

    Woo hoo!!! Just one more reason to love SmartyPig.

  • Dawn

    Way to go!! My family just returned from a weekend getaway, all paid for with cash we saved with Smarty Pig!! I just wrote a check for summer camp with no worries. Sprucing up my house this spring with help from the Home Depot cash boost. I’m so proud of what this site has helped my family to achieve!!! I reccomend it to everyone I know. Thanks for the rate boost!

  • Melissa

    The headline is totally deceiving to anyone with more than $50k in their account. I am so not looking forward to finding a place to move my other $200k. Thanks for being just like every other bank out there–having the headlines tell half the truth.

  • jon

    way to hurt the people who have already saved with a reduction in rates

  • matt

    Very nice way to reward those of us who have been saving for years to have more than 50K.
    Another example that being a saver is a joke in this country. Now I’m being punished for doing the right thing.

  • Youhavegottobekidding

    spin is everything..”we raised rates!” (not “decimated rate for high end savers”)…saving= something this site is supposed to ENCOURAGE..not!

    message: save a little..not too much though! instead spend away like a good American! Pathetic…

  • anthony

    Awful business decision. Punish those who have saved money over $50,000. Trusting SmartyPig in rewarding all people wasn’t good enough for them. Must punish the rich and help the less fortunate? The amount of withdrawals will be huge. SmartyPig is real smart. They saw the amount of interest they were paying out and said, NO MORE!! “Smart” move. Online banks are cruel. We should all go back to the old school banks like it used to be. Real Nice, Real Nice!!!……

  • James Caldwell

    “[I]tis high time to take care of the people who are trying hard to save and spend smarter rather than gouge them like everyone else.” Isn’t a rate decrease a contradiction for those who are fortunate to have saved over $50K? I will actually have to withdraw money in order to get the best rate. Go figure.

  • Trini

    While I’m one of those people that will be seeing a rate increase, I am extremely disappointed in the spin that this message involves. What’s the real story here? It sounds to me that you’ve joined the ranks of the banks that are playing interest rate games based on amount of money in savings and next thing we’ll be asked to start using debit cards 10 times a month to keep these rates. Come on. I’d really like to know why this change took place, not the spin that makes it sound like I’m getting a great deal.

  • spf

    yo, what am i supposed to do with the money above $50,000?

  • Jim

    WOW!!!! I like many others, will B moving my account[s] below your 50K penalty mark. I’m curious, when others do the same thing, how much will your balances decrease and won’t this effect your bottom line?

  • Gary

    I have never seen a bank offer a lower rate for higher balances. Is Smartypig smart enough to know they will loose either all my savings or at least the amount over $50,000. This will also be the case for my spouses account as well as anybody else in this situation. Thank goodeness we have bank regulations that require them to give us 30 days notice. Get ready for the giant sucking sound of money coming out of their bank.

  • Chad

    If you are going to make a change in interest rates, you don’t need to give some pathetic (B.S.) reason for doing so. I guess this paragraph would appeal to a large amount of your ignorant clients, but we know this isn’t why you made the change.

  • Rolf

    I suspect that everyone with more than $50,000 with you will move that “excess” elsewhere – I know I will – because this plan is just set up for those people to subsidize the rates for those under $50,000, and why would I do that through a Savings account, where the entire point is to maximize return? A very poorly thought out decision, Smartypants/pig.

  • Maureen

    Um. Here’s the thing. If you have over $50,0000 in liquid assets, you have a nearly unlimited palette of investment options. If you are not looking beyond SmartyPig for investing that huge sum of money, you are seriously undereducated and need to do some serious research to determine a suitable approach to money management. If, on other other hand, you are struggling to put $500 together (the people for whom this site is designed, such as myself), you need all the help you can get. Thanks so much, SmartyPig!

  • Bob T.

    Bankers and their games! Since I am well above the $50,000 threshold, you leave me with no alternative but to close my account on May 19th. I can still get a better return than 0.5% APY that you will begin to offer. Forgive me for not realizing that you only wanted to cater to small investors.

  • Rick

    “Dramatic Lowering of Rates!” You are not simply raising rates and need to change the headline. With 1.55% CDs available, all $50K+ savers will have to leave SmartyPig. What happened to this formerly great program? Why are you abandoning your best savers?

  • Nick
  • BarbS

    I am tired of trying to do the right thing only to find myself having to jump through hurdles and scale mountains to do so. Really, SmartyPig? Just because I have more than $50k in a savings account, I’m not an “everyday person with everyday needs and wants”? What the heck do you think I’ve been doing for the past 15 years besides getting up at 6 a.m. to go to work and coming home at 7 p.m. to make dinner, pay bills, and take care of my family? Do you honestly think a big pot of money magically appeared on my doorstep one day? Be careful who you make enemies with…it’s those of us “high balance customers” who bailed out the banks that lent to people who had less than $50k in their pockets. I’ll be sure to remember that the next time these people and the banks come looking for a handout.

  • jon

    Maybe with all the feedback they will rethink their strategy or watch people FLEE with their $

  • M S

    Happy to hear about the increase on the first $50k. But as others have written, the “spin” on this announcement is thinly veiled indeed. Everything over $50k is heading out of smarty pig…

  • Eric Davies

    Posted today on that same website…

    SmartyPig Users,

    We are pleased to announce we have added the ability to create a Payable on Death (POD) Account to your SmartyPig Profile. To add a POD account and assign a beneficiary to it, please log into your SmartyPig profile. On the left hand side of the screen, please click “Edit Profile”. Next to Payable On Death (POD) Beneficiary, please click “Add”. Next, enter in the information of your designated beneficiary and confirm the requirements of your beneficiary and click “Save”. Please be sure to then click “Save Changes” on the Edit Profile page.

    We are very excited to add this new feature for our users, and appreciate all the feedback and suggestions you have provided on this topic.

    Thanks,
    John

    The POD is there – just go edit your profile.

  • andrew

    As a “valued” customer who has a balance of over 50,000 I am greatly saddened by Smartypigs move. Yeah, it will help 95% of people who use smarty pig but at the same time it with alienate the 5% who probably contribute 50% or more of there assets. Real smart. Smartypig is probably hoping some of these high balance individuals will misinterpret their marketing headline and keep their money in there so as to subsidize those with balances less then 50,000. AS for me, I plan on moving my money to another bank tomorrow, and I hope all those who have balances over 50,000 do the same to send them a message.

  • Matt

    Maureen, please enlighten the “uneducated” masses here what 2% or greater return options are available to those of us with more than 50K (FDIC insured, of course). Obviously there are more risky investments I can make that can bring greater return, but this is a SAVINGS account, not an INVESTMENT account.

  • A

    Been saving for a down payment on a house which, surprise surprise, requires more than 50k. Very disappointed in this move by smartypig.

  • Michael

    One question … in the footnote that says “… total balances of all goals within your SmartyPig profile will be aggregated,” does that mean the $50,000 limit on the higher rate is calculated on my ~current~ balance, or on the amounts I have set as my final goals for each account? My balances add up to less than $50,000, but my final goals add up to more. So which side of the fence will I be on come May?

  • Ellen C

    I’m one of those who has saved over $50k–I want to buy a place with 20% down. As others have said: (1)as of 5/19 all but $50k of my money is leaving Smarty Pig and (2) I’m really disgusted on how a rate decline for good savers was hidden as a “We’re raising rates” announcement!

  • MDS

    Here we go again, another “high yield savings” operation watering their product down…guess the big banker guy wasn’t able to sustain the “high yield” without spinning a lie.

  • KeithB

    Mr CEO-
    Do you have ANY idea how much it costs to send one or more children to college and/or grad school? THAT was the purpose of my savings at SmartyPig. But now you are telling me that I will be punished by having more than $50,000 as a goal? IOW, you are redistibuting interest from those who have more money to those have less. You should be ashamed at coming up with this marxist nonsense and applying it to banking.

  • Beth

    I’m withdrawing all my money above 50K.
    Thanks SmartyPig!

  • Val

    I am certainly planning to move all my money in excess of $50K – isn’t it in your incentive to offer higher rates to accounts with higher balances, because of the lower administration costs?

  • WTF

    Raising rates? Dishonest obfuscation at its very worst!

  • sk

    You are probably counting on a good number of people with over 50K to either by ignorance or laziness to just leave their money in your bank so the piddling .5% rate won’t be felt or seen.
    Smart move Smartybank.
    I guess the economy is not growing fast enough for Smartybank to absorb the large influx of money they were getting. Supply and demand. So I understand the decision. Satisfy the greatest number of customers at a sustainabl rate. Unfortunately this alienates the bigger depositors and may come back to bite the bank.

  • KB-NYC

    SmartyPig writes:
    “This tiered structure will greatly benefit more than 95% of our customers who are working hard towards their goals and using our redemption program to earn even more cash when they reach those goals. While a small portion of our users will see a rate decrease based on their limited use of the service, we feel strongly that our mission will greatly benefit our core customers who are saving for various milestones in their everyday lives.”
    So, those with MORE than 50K are NOT working hard towards their goals? And those with MORE than 50K as a goal use the service less than those with a goal of less than 50K? How so? Those with 50K or more are also saving for “milestones” in their lives.
    This policy shift is a slap in the face to those of us who had the “nerve” to reach higher.

  • RickG

    I too will be withdrawing my excess funds. In addition to the deceptive headline, I find it offensive to suggest that those of us with higher balances are naturally making “limited use of the service.” I have automatic monthly transfers and I have goals that I’ve realized and cashed out, yet I still have a +$50k overall balance.

    @Maureen. Perhaps you might learn something from us “seriously undereducated” customers. A 2% risk-free short term cash investment (during a recession, no less) that’s part of a larger portfolio is hardly a foolish investment.

  • Charlie B

    I’m one of those who has been “abusing” your system by using it as a high-interest savings account for large deposits, with artificial goals. You have every right to tell people like me to take our money elsewhere. Your new policy is perfectly reasonable, and in line with your business mission.

    Why, then, did you have to be so sleazy about announcing it? You’ve turned what should be a positive step into a PR nightmare. Shame on you!

  • Dan

    Let me understand: You are raising rates by a trivial amount for balances under $50k — 2% to 2.15% — and you are *eviscerating* rates over $50k — 2% to 0.50%. And the self-congratulatory headline is: “WE’RE RAISING RATES!” Forgive me if I don’t share your spirit of excitement. Now, because of your decision, I’ve got to shut down accounts with you and find a new place to go. You’ve created a lot of inconvenience for me. But don’t let that interfere with your celebration!

  • j

    Deceptive advertising, you are hurting people who want to save.

  • Alex

    I am very, very disappointed in this announcement. I have been saving for a house, which requires more than 50k in cash if I am going to buy it in the responsible way with 20% down. It seems like more and more, this country is focused on bailing out the people who can’t take responsibility for their own actions. At first I thought smartypig was different, but now that appears to not be true. Yes, helping people save for that shiny new toy and getting them off the credit card is a valid goal, but to really help this country, you need to help those people saving for houses and the education of their children (both with require significantly more than your 50k cap).
    I was just about to encourage my parents (who are near retirement and need large cash reserves for expenses two to three years out) to move their money into smartypig, but now I will need to tell them to look elsewhere.
    I urge to please reconsider this move, and don’t penalize those of us who are looking beyond the next flat screen TV and who are saving for the goals that will really help this country.

  • DCB

    I can’t believe you would do this to prudent savers. Paying less than .5% for deposits over 50K? I will be moving my excess out and finding another place for the money. I really thought Smarty Pig had higher standards than some of the big boys. SmartyPig should change it’s name to SpinThisPig.I hope someone at your institution will rethink this idea. Remember when Coca Cola introduced it’s new formula back in 85? That lasted less than two months.

  • notacorecustomer?

    “Smarty”Pig..time to change the name. Thanks for penalizing those of us who are actually SAVING. Sorry im apparently not one of your “core” customers who cashes out on retailer gift cards everytime I get a couple hundred dollars in my account. You aren’t in the business of helping people save money, you’re in the business of retailer kick backs and enticing people to burn their savings on things they dont need. Real savers are saving for things that you dont get from a retail store, like homes, college educations, and paying down debt!

  • Stupidstupidpig

    What B.S. I was all about SmartyPig but now I’m through with them and will tell everyone I know to avoid the POS!

  • Lisa

    They’ve just lot my business.
    Punishing the savers. I never thought I’d see the day.

  • Jman

    Headline: MOVING MY MONEY INTO SMARTYPIG*

    I’m with the movers. Like Alex, we were saving for a house, which in SoCal requires slightly more than $50K! I had scheduled to add another $50K to my account yesterday. Well it was Sunday, so the transaction fortunately did not go through so when I got this bogus email today I canceled the transfer.

    I liked SmartyPig because of its egalitarian nature – high interest rates for everyone, screw nobody. I guess things change.

    *Only if smartypig changes their policies. Otherwise, I’m outta here. Buh-bye

  • Bill

    Not so smart — but very PIGgish. Add my money to the giant sucking sound of withdrawals…

  • Doug

    If it walks like a pig and eats like a pig and smells like a pig then its probably just a pig oink oink

  • DallasDon

    I don’t understand the thinking of lowering the interest rate for amounts over $50k to 0.5%

    Are they trying to reduce the amount that is invested?

    If so, why increase the interest rate?

    This makes no sense to me.

  • http://None D

    For those of you in that 5% like me, here’s an alternative that looks like what Smartypig used to offer and maybe even a little simpler.

    http://www.readysaver.com/saver.aspx

  • Chris

    Somewhat disappointed with the annoucement (although I’m currently somewhat under $50k), but it’s completely understandable and is fact probably a brilliant decision. Think about their situation. Loan demand from qualified borrowers remains low, people (SmartyPig users) are saving more so there’s a relative imbalance in the supply/demand equation (too little demand chasing too much supply). How does SmartyPig handle this? Well, they could lower their rate to 1.9% or 1.75% (whatever makes financial sense) and tick off all their customers and reach their goal of reducing the cash supplied to them (some customers leave) or they can make a small subset of customers (the 5% with 50k+) very angry (0.5% is just telling them to take their money and go), but keep the other 95% happy and meet their cash level goals. So the trade-off is make everyone somewhat mad or 5% really angry. Seems like a no-brainer. Just like you’re not using their service for altruistic reasons, they’re ultimately supposed to make a profit. I commend them for the innovative solution (in this difficult economy) that meets the needs of most of their customers.

  • Jeremy

    The title of the article should read Big F you to customers with more than 50 K

  • Jeff

    What a joke. You punish everyone who is already saving their money for house down payments and such. I will be closing my account on May 19. Way to punish responsible savers.

  • http://hightideimports.com Jim

    I will be moving my money by May 19th. Penalizing those who have saved over $50,000 is a ridiculous decision. I was about to move a fair amount of savings into my Smarty Pig account, but now I will look elsewhere. Not all things that we save for can be bought for $50,000.

  • Bryan

    In the email i recieved it said…
    “… The interest rate and APY are variable and subject to change after account opening. Fees may reduce earnings.”

    What are these ‘fees’?????

  • Chris

    Man… After reading these comments I feel SUPER broke. I love the fact that my interest rates are rising for my little amount of $2 grand. Smartypig was made to help people like me who are saving up for items versus putting them are credit cards.

    Smarty Pig has forever changed my life and my family tree. For that I am very greatful.

    Thanks Smartypig,
    A Very Satisfied User.

  • Kim

    Certainly disappointing news because…

    1) Your announcement deceptively trumpets a rate decrease for me as a rate increase. Didn’t work. I caught on after the shock. (I thought you’d reward larger savers with a HIGHER rate on larger balances, as most banks do.)

    2) You imply that I’m NOT a “everyday person with every day needs”. Funny – I thought I was.

    Guess I gotta hunt around now for another honest, fair firm for some of my savings. I used to think Smarty Pig was such a firm, but not any more.

    Thanks alot.

  • SmartestPig

    Certain people on here are sort of sounding a bit ridiculous. I happen to be part of that 5% and guess what? I’m staying. And I’ll tell you why.
    It’s only a matter of time before other banks start doing the same thing. In a way, I’m fortunate to have been able to save up as much as I have over a span of several years. Sometimes I guess I take it for granted. Maybe it’s someone else’s turn to enjoy that thrill of saving up that first grand or so with a decent interest rate. I remember that every time I deposited money, it was like this secret internal giggle because I could see how much was in that account.
    I used to keep my money (and still keep a small sum) in ING. Their rates started dropping regardless of how much or little you had in an account. It sucked. I keep more of my money in here than in there. If ING would have done the same thing today as SmartyPig, I would still benefit and maybe others on here should consider spreading out a little bit.
    Ever heard of ‘don’t put all your eggs in one basket?’ Yes, it’s a definite blow. But how many times are you going to move your money around until you’re happy with it? This is the state of things right now in our economy and I’m okay with SmartyPig making a very good PR (as that is my career) decision. If 95% of their customers fall under a tier that will benefit, better to please the 95% than lower rates for everyone and make all kinds of people consider leaving in or out of the 5% bracket.
    If you don’t like it, move it, but don’t pretend it’s not a smart decision.

  • Free spread?

    @chris – The yield on a 30 year treasury is > 4%. My goals have a ~5 year time frame so the headaches of long term treasuries do not make sense for me, but I fail to see why smartypig wouldn’t love having a 2%+ spread on basically free money.

  • Julie

    I feel compelled to second, third, fourth and forty-fourth the comments posted above by “over $50K ers.” Like many of these individuals I am also saving for a house, which in my city requires more than $50K for a down payment and that’s for a starter home. Although I am not quite at the 50K mark, I am close, and I am incredibly disappointed at this latest news. It seems that Smarty Pig is only concerned with perpetuating low level consumer culture. If you’re saving for a product that you cannot purchase with one of their partnered gift cards, they your business is unwanted. Be careful Smarty Pig…you’re nothing without the customers who permit you to hold large sums of money for them.

  • Vince

    Smarty has made a poor move here. I am moving my cash above $50k. It is ridiculous to punish those who have tried to become savers for the long haul vs. short term.

  • democrats

    glad you guys are following our ways now smartypig. ABANDON THE “RICH”!

  • Matt

    Looked into readysaver.com…

    Looks like they may do a HARD credit pull :(
    http://www.fatwallet.com/forums/finance/989487/

    Also, they have a pretty low bank rating:
    http://www.bankrate.com/rates/safe-sound/bank-ratings.aspx?t=cb&i=west bank&r=&a=&c=&s=&z=&p=3

  • Tara

    Terrible! I am trying to save 100K for a house down payment (we live in Boston) – now I have to move my money. Argh!!!!!

  • j

    @chris #57. if 2k has changed your family tree…HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA . your family consists of guinea pigs

  • Nate

    I think I would be frustrated too if I had a balance >50k, but in the end, they make the rules and we all agreed to the conditions that clearly state that rates are subject to change… Time to adapt yet again to an ever-changing economy. This surely won’t be your last disappointment when it comes to gaining wealth.

  • http://www.vhstodvd.com Keith Gilbert

    Great. This is why I signed up for SmartyPig in the first place – there was no maximum balance.

    I might be leaving SmartyPig…

  • Mar X

    I’m not taking out the funds in excess of 50K. I’m taking it ALL out.
    Make your views known to the CEO, who said, “With our decision to focus on our goal-oriented customers, we hope to help you earn even more.”
    Apparently, if your “goal” is over 50K, THAT is a BAD thing. What is happeening to this country where we are demonizing success?

    Bob Weinschenk, CEO
    bob@smartypig.com

  • R.E. Diculous

    Just called Best Buy, Macy’s, and The Gap. Told them I wanted an extra discount for spending LESS in their stores than those who are speninding MORE.
    You should have heard the laughter!!!

  • WTH

    This has certainly stirred the pot for savers like myself! Total deception to the savers over $50k!

  • Chris

    @j (66) – It changed my family tree by making me look at money differently. Before SP I have none in savings and a huge amount of Credit card debt.

    Now I have paid off $17K of debt and have around $3,000 in savings. So screw your attitude..

    Chris

  • j

    @Chris 72 . There is a song by Justin Timberlake that might fit your liking. Its Entitled ” CRY ME A RIVER’

  • A

    Yah, I’ll be making sure to keep my balance below $50K. Fail.

  • William

    You are just like all the others! Lure us all in with a strong rate, then pull the rug out from under us. This baloney about increasing interest rates is not worthy of any decent company. Please, anybody who has saved up $50,000 for retirement (like me) and put it in a bank is certainly not rich — just afraid of Wall Street. Now you are just as bad as they are. I am deeply disappointed with you — no morals, and full of deceit — and now I have to take my life savings somewhere else, after having made what I thought was a careful decision to place them with you. Shame on you SmartyPig!

  • Drew

    All of you who benefit from this, congratulations. All of you who don’t, get over it and go somewhere else. Stop pretending that you actually care about Smartypig as a company by offering your opinions as to whether or not this was a good or bad move on their part. Those of us who gain from it are happy and those of us who don’t, aren’t. Such is life.

    I think the bigger news is that Smartypig finally added a Payable on Death option. There should be a blog post about that!

  • z

    @Chris #72 – That is very impressive, it sounds like you have made some major changes and are saving a lot. If you keep up that savings rate you will hit the 50k cap quicker than you might think.

    @smartypig – Some hard numbers would be appreciated. What is the average amount held by the 95%, and just how much of a savings/lending gap is there to warrant punishing your high balance users (if they represent such a small number compared with the other 95% of users).

  • Chris

    @j – That is a very good song.

  • http://www.debtkid.com Debt Kid

    Nice to see someone actually raising rates. Wish it was on all deposits though!

  • dc

    Insiders can loan their kids the larger accounts funds and have them start sub 50k savings. Woohoo. Talk about arbitrage.

  • j

    @Chris. Were you able to save on the backs of the wealthy under the new obamanomics redistribution system? Man my back hurts from carrying you guys

  • Publius Pigus

    Smartypig’s veiled attempt to hide its whopping 75% rate decrease for balances larger than $50,000 is simply dishonest. On top of that, Smartypig customers are supposed to believe this will “benefit more than 95% of our customers.” They’ve already told a “half-truth” once; what’s the other half of the story to their 95% claim? Honestly, only 5% of Smartypig’s customer-base has savings or savings goals more than $50,000? It’s interesting to note that in only a few short hours since Smartypig posted this blog, over 95% of the comments* are from people with investments over the $50,000 threshold. Perhaps it’s a good “business decision” to slash rates for a small portion of their clientele, but it’s never a good PR decision to deceive your customer base. Time to move ALL my money elsewhere. *Based on undisclosed supporting statistics and 5% false logic.

  • Chris

    @j (81) – Nope, unfortunatly I will get none of your money, but I wish I could. I am simply a person who has made very poor financial decisions and between Smarty Pig and Dave Ramsey I am starting to turn my situation around.

    I have a long way to go, but it is so much easier to see the light at the end of this tunnel. I overspent every dollar that I made and now am working to fix that.

    Chris

  • Robert

    Yeah, it looks like the ability to add a POD beneficiary has been added to the profile page. That’s more important to me than a small 0.14% increase in interest. Thanks !!!

  • WOW

    Very disappointing, Pig. I, like many others, am saving for a house. I can’t believe you are leaving us hanging like this. I’ll be pulling my money now and don’t see why anyone would want to stay with your .5% slap in the face. The sad part is that I really believed too.

  • tellthetruthbob

    CEO Bob has been kicking back in his $10,000 leather desk chair laughing at these posts all afternoon. He wants all of us with 50K+ to pull our money out! Smartypig is not a bank and its not in the business of reinvesting our money. Smarty just passes the deposits on to West Bank. Bob doesnt want to pay interest to real savers. He just wants to peddle gift cards to low-incomers whose biggest aspiration is saving $1000 for a new TV. He pays very little in interest to this person on their tiny goal, but gets a fatty kickback from the retailer when they cashout in gift cards. Why do you think he has no banking/finance expertise at all? He is a tech guy from Silicon. Complain all you want…if you are actually saving for something legit and Bob can’t sell you a giftcard then he is perfectly happy with you taking your money elsewhere.

  • ChrisO

    Well it was nice to be with you. I’m one of those 5% that has too much money so I will be moving ALL of it out.

  • ChrisO

    Actually I don’t get why this is better for SmartyPig at all. After all the bank takes the money and invests it at a higher rate. Why does it matter that much to push the people with $50,000 out? It shouldn’t matter to the bank if they have 1 account of $100,000 or 10 accounts with $10,000, they still have the same amount of money to invest. I would think it costs more to maintain more accounts, not less. It is because they have to pay more interest? Then maybe this isn’t a sound bank that knows how to properly invest the money it gets and as such, should be avoided. I might even see saying something like over $50,000 we pay 2.01% and below 2.14% (and so they would get the money above $50,000 for less), but to set it a .5% there is no doubt they are saying “we don’t want your money, because we don’t know how to handle it”.

  • John

    Of course they will still make money. Most with balances over $50,000 will just read the headline: “We’re raising rates!” and don’t read the rest.

    Meanwhile, West Bank continues to loan out your money at high rates.

    Disingenuous at best.

  • Scott

    I thought Smartypig is different than the other banks that are trying to play the interest rate game. If Smartypig is serious about helping people save money, their policy did exactly the opposite. Discourge higher savers or people like myself to save for a specific goal (i.e. buying a home etc.). SP can kiss my money good bye.

  • Steve

    Bye, bye DummiePig. Nice knowing you.

  • Arnie

    Shame on you abusing the spread. .5% and you loan it out at 5.0% or more. Any smart money manager knows banks profitably operate at a 3 point spread!! Piggy-Piggy!!!

  • J

    Disappointed at the rate change and misleading headline. I’ll be moving a lot of my money out to another savings account.

    .50% APY for balances over 50K is not good at all.

  • Bob

    It pays less as you save more! Brilliant idea.

  • ChrisO

    Maureen,

    Who are you tell the people that have saved more then $50,000 to do with their money. After all if you can’t put $500 together, then you don’t know how to manage money. Don’t you realize that this money wasn’t saved in a day, and yes there is other places to put money and we know it, but we also know the risks or that our money might be tied up for long periods of time, we might not want that. I think we are a lot better at determining that then you are.

    After all I could say “Why do you care about .14% when you only have $500?” Do you realize that you will have to keep your $500 dollars in for a full year just to get 70 cents extra!

  • anthony

    I have a great idea!! We know the pigs are smarter than we are. You know what I mean, lots of money, lots of interest paid out. Smarty pigs say no thanks, were not paying anymore. SOOOO, lets look for something better!! Please post in this blog all the FDIC insured online banks that want our money and are willing to pay more than .499%. We all agree that Smartypig made a stupid decision so let’s be the educated wealthy people that we are and move forward as true strong Americans that we are. Smartypig can have the idiots that are in debt with no money. Let’s move forward strong. I’ll start out by suggesting ingdirect.com. Anyone have more suggestions? Let’s go people, move forward and be strong!!

  • ChrisO

    A comment to the WalletPop article telling the “great” news suggests that SmartyPig is doing this because they just want people that will use the discount cards and SmartyPig will get the merchant kick backs.

    This doesn’t make sense to me. After all just because you have $50,000 that doesn’t mean you wouldn’t want to use the discount cards (I have). As a matter of fact you would think that these people would have more money to spend on the discount cards. And do you really want to get rid of 5% of your customer base so that the remaining customer base buys more on average (but not in total)??

    It can’t be the actually accounts can it? Maintaining an account has to be piddling amount of disk/CPU at Smartypig. And to the actual bank it isn’t even a bunch of goals, it is just one account.

  • Terri

    I use smarty pig to save and currently have 6 goals with you. I’m happy that the interest rate is going up for most people. Unfortunately, as one of my six goals is downpayment for a house, I am over the $50,000 balance limit for higher interest. I can’t believe you’re basically forcing me to move my biggest goal to a different financial institution.
    I promote smarty pig to all of my friends but can’t do so any more for the vast majority of them who are saving to buy a house in California. I sincerely hope you reconsider your new policy and extend the increased rate to all.

  • anthony

    Keep in mind something people. All this time we are wondering why no other online rip off bank comes close to matching smartypig. We go along with it though, making mad green for doing nothing. CEO realizes it and says, hey, let’s drop the bomb on the rich. Never trust anything online, never trust these non-sense online banks. Imagine this for a moment, you grow a set, send your money into the market, you know, into your online trading account, risk it all, smartypigggg doesn’t want you so spin the roulette wheel, maybe buy ford, or ge. than the market fails, which it will, the dow goes from 6500 to 11,000 in less than a year, believe me, the market is going to crash, than you loose all your dumbass pig money and your broke….
    who’s laughing at the man who hides his green under the matress now, not me. Respect your elders and the wisdom that comes along with it…… trust no one!!
    This is a great learning experience, the rich must suffer for the stupidity that WILL NEVER,, EVERRRR, GO AWAY!! Makes me ill, but we will pull together and find something. There has to be some bank out there who wants the millions that will be pulled out of dumbpig!!

  • Kirsten

    I am very thankful for Smarty Pig’s interest increase for new savers. Unlike many people who have been saving for a long time, my accounts are small and I do not yet have the opportunities to put my money into high-yield CDs and other saving methods offered by my bank. While I also advocate more transparency in the headline, SmartyPig seems to be pretty upfront about their policy changes within the article itself. Hopefully those with too much in savings to benefit from this policy can find a person in their life (son, daughter, niece, nephew, etc.) who can.

  • Anne

    Set the rates how you guys see fit–it’s your bank/project after all. Moreover, slant things the way you want, charge hidden fees, make a profit–I have very little problem with this. However, don’t paint all other banks as being sleezy and deceptive if you’re going to play the same shameful games. Be honest, or at the very least, avoid the hypocrisy. You’ve lost a good chunck of your slowly earned trust. For all of us below the 50,000 mark–we’re next. Pig–if you’re smart, you’ll apologize for the way things were skewed today.

  • http://www.smartypig.com Bob Weinschenk

    I’d like to thank everyone who took the time to post on our blog. All comments are appreciated and help us create a better product. I’ve updated my original post above to help clarify some things and provide some additional rationale behind our decision. Please take a moment to read. Thank you.

    Bob Weinschenk, SmartyPig CEO
    bob@smartypig.com

  • Doing the numbers

    The point of this move was not to reward small savers, but to drive out unprofitable large ones. Had the CEO said that from the beginning, it would be easier to respect this business decision.

    What does this mean for the saver with, say, $10,000 in his account? Exactly $14 a year. Better than nothing, but hardly worth an exclamation point.

    I’m sure it’s true that the smaller savers use the gift cards more. That’s because gift cards are just another tool to ensnare the unsophisticated. The retailers can depend on people forgetting to redeem at least some of their value, and that effect more than offsets the discounts.

    As for those of us with larger deposits, our money isn’t locked in, and there’s plenty of time to move it before the change, so really, aside from some disappointment, what’s the harm?

    That said, people should stop threatening to withdraw all of their money rather than just the amounts over $50k. 2.15% on $50,000 is still better than what you’ll find elsewhere. We’re not children. The only way to win in the financial game is to be dispassionate about it. So keep $50k here, and put the rest in another bank at about 1.5%, and hang on until rates go back up as they inevitably will.

  • ChrisO

    Thank you very much for explaining the situation, and for the POD feature.

  • http://Republicofaustin.com Rachel

    Having personally met Bob, Mike, and Jon from SmartyPig, I know that they truly have their customers’ best interests in mind. The idea behind their site (and their blog) is to get Americans to spend money wisely and not rely on credit cards. Their target market isn’t necessarily you all who have managed to save up $50,000 (kudos to you!), but rather those who have $50,000 in credit card debt. Their site encourages them to have smarter money management skills, and it offers incentives for people to set and achieve financial goals. I was impressed with them all when I met them, and I will continue to use their site and recommend it to my friends and family.

  • KT

    While I understand the dissappointment of the $50K+ savers, belittling those with less savings and calling them ignorant and assuming they’re in debt and saving money only for material goods is…well, ignorant.

    I have saved over $50K and will close on a house in June, but only a portion of my savings is in SmartyPig. Much of it is still earning over 4% in laddered CDs and I-bonds. I see SmartyPig as just one useful tool in my overall portfolio and a way to save money on a lawnmower when I do buy my house. Just because I have less than $50K in SmartyPig does not somehow make me lazy and “looking for handouts”. I am a very satisfied customer of SmartyPig, and will continue to be as long as I’m getting above-market rates.

  • Jason

    For all you whiners about the interest rate decrease. If you have over 50K sitting in any savings account; you need to educate yourself in investments and money a little more. There are far better places to let 50K sit. Granted there is a little bit more risk invlolved. You souldn’t complain about your reward if you don’t want to risk anything. Everybody needs to grow up and stop complaining. This is a business.

  • Dawn

    I have to say that I’m surprised at how nasty some people here are. I have a rather large retirement fund, stocks, bonds, and other investments in my portfolio. I don’t keep all of my money in one place, so this cap of 50K doesn’t hurt me. Please don’t assume that because I don’t have all my eggs in one basket that I’m a loser trying to buy a TV. I am, however, a consumer…and who isn’t? I love to travel and so I’m saving for several trips, including my dream trip around the world for my 25th wedding anniversary. I camp with my kids, so naturally I need equipment now and then…Cabela’s gives a nice boost. I already own a home which I purchased years ago, but it needs repairs now and then. A boost from Home Depot certainly comes in handy. Appliances don’t last forever…etc. If you want to vent and yell at the CEO, have fun…but don’t judge the rest of us here. It makes you sound obnoxious.

  • MDS

    Hey Jason – April 20 2010 @ 7:27am -
    Sounds like you’re a whiner–whining for the likes of Mr. Weinschenck. And your comments about business, hah–what a laugh. “Business” as we are now forced to accept it has led us younger investors to question the entire fabric of the nation that sanctions its unscrupulous practices (401ks, 403bs, but no solid pension plans for the most of us). There is a big difference between liquid investments and the higher “risk-rewards” you say are out there (higher risk-reward usually involves handing money over to some joker who not too long ago just let a huge chunk of our retirement portfolios fall off a cliff) and CDs that lock your money down (yeah, yeah, you can put it in a ladder yaddah yaddah).

    As far as telling the TRUTH with no spin, wow, Bob, you’re a piece of work. The headline was “We’re raising rates!” Of course, I can read small print so I know to look for the spin. It’s just a sign of the times–none of you guys who by luck of the draw got the power to run the place can keep a straight face when you run things like that (hey, pat yourself on the back for your ability to put it in the asterisks and fine print–good job!).

    If it’s too good to be true, it usually is.

  • Michele

    When I first saw the rate reduction above $50K I was bummed, but then I had to remember that I don’t have $50K. Of course there are always the rate chasers that will move all their money to a place that has the highest rate.

    I have NEVER thought of SmartyPig as a “savings” bank. I thought of them as a “goal oriented” savings. You saved money for a goal and then cashed out (whether redeeming through a vendor or moving the money back). I am getting ready to start saving for my E-Fund. It will not surpass the 50K mark by a long shot. When I reach that goal, I will most likely let the money ride with SmartyPig as I can’t get better rates elsewhere (even with CDs locked up for months). I will continue to have my other savings goals (car, insurance, vacation, Holiday) that move in and move out.

    I thought the purpose of SP was to set a goal, save for it, and then use the money as intended. Not to move all your riches here. So, the big accounts can move on and the 95% of us will still be here.

    People whined to NO END when SP dropped their rate and said they were taking ALL their money and leaving for other banks that had similar rates. Well, ALL those rates have dropped. SP held their rate. They make a change and AGAIN all the naysayers are here complaining again about taking ALL their money and running (I thought they left before).

    Whine, whine, whine.

  • http://guh.nu drew

    You should update the main page at smartypig.com. The main page describes the rate as 2.01 APY with no mention of the new tiered interest rate.

    It currently reads
    “It’s 2.01 APY*
    Providing you one of the most competitive interest rates in the country.”

    with the fine print
    “*Annual Percentage Yield (APY) is effective as of 4/20/2010. Rates may change at any time without prior notice.
    This site is protected by copyright and trademark laws under US and international law. US and international patent pending.”

  • Teresa

    I understand why you are raising/lowering your rates but I do not agree with your decision to reward one group at the expense of others. I have recommened your bank to many friends in the past but not do so in the future.

  • Jim

    Since my comment from yesterday was obviously censored and never posted, let’s try again with different comments. What I can take from the CEO’s update yesterday is that while $50K is the rate cutoff for now, it will soon be $35K. Then as more people gravitate away from that level, the rate cut-off point will drop again. Look at the boosts they offer folks, they are not for “big ticket” items (house, car, college). They want people to save small amounts so they will then spend – because that is how SP makes money. If you are looking to save because it is the smart thing to do, they don’t want you here. I originally thought SP was a little more altruistic, but oh well.

  • brink

    This move is disappointing but frankly inevitable – 2% was the best “risk free” rate out there and lots of us figured that out, but there’s no money for smartypig in paying above market rates for very long.

    Instead blame the Fed. The current absurdly low interest rates are essentially a direct transfer of wealth from future tax payers to the wealthiest of the wealthy: the wall street Banksters.

  • Mike

    To those with >50K in savings that want to continue to receive 2% APY on their ENTIRE balance, not just the first 50K, here’s a link http://www.readysaver.com

  • Laura

    As a person with a high ON TRACK goal and a balance effected by this change, I’m pretty annoyed with this change. Have to put some thought into what will happen, One thing I do know anything earning less than 2 percent is moving to a better interest rate.
    Do I have to stop the goal and cash out the entire account? or is it allowed to reduce under 50k? and OMG my bank will charge fees to accept the deposits! Thanks a LOT!
    signed, unhappy!

  • anthony

    Try to remember to leave less than $50,000 in your backstabbing pig account. They would love for you to withdraw everything except 50k. Here’s the deal, one penny over 50k and they will pay .499% not the 2.13% they are promising. go to readysaver.com. no tier restrictions(punishment for having money). I’m hoping to read more suggestions of new online banking besides readysaver……..

  • Scott

    I’m trying to think of another time when a company intentionally gave away market share… and I’m drawing a blank.

    Did Smartypig consider renegotiating their agreement with west bank? Even if smartypig is telling the truth when they say they make NO money off deposits, SOMEONE is (or should i say was). Why wouldn’t SP just go to west bank offering two choices, either pay smartypig a small percentage (less than what west bank makes from the holdings) and keep everyone happy, or accept that fact that all customers will withdraw down to 50k and take their money elsewhere?

    The bottom line here is the total value of all deposits is going to go WAY down… and that means west bank makes WAY less money. So maybe smartypig doesn’t care, but it still seems like with a little saavy they could have milked WB a bit AND increased the rate to 2.15 for the low balance folks

  • ChrisO

    Mike thanks for the information.

  • Thomas

    Thank you, SmartyPig!

    Instead of doing what I thought was going to be the case (lowering rates across the board), you decide to assist small time savers – which is the point of this in the first place.

    To those of you who are complaining about the 50k+ drop, how many of you are willing to work for free (or even lose money)? This is what you are asking of SmartyPig, and it is unrealistic. I’ll be the first to say I have never used their “boost redemption program” or SmartyPig Debit Card, and I am grateful that they will continue to offer ACH transfers back to my back for things like my emergency fund. In all of business, there will be pros and cons.

    If SmartyPig lowered rates across the board, all of you would be hurt. If SmartyPig only allowed redemptions through their affiliates or the debit card, all of you would complain. This solution benefits the largest amount of consumers (95%+ according to his post), targeting the consumers who help SmartyPig generate revenue (those who do take advantage of redemptions), and limit the downsides.

    Good job SmartyPig. Keep up the good work!

  • Laura

    Looking and looking at the help sections on just how I remove the part of my balance that will not receive at least 2 percent interest, without canceling the entire goal amount.?? please update your help section with CLEAR instructions on transfering back PART of ones smartiepig account. Thank you.

  • Anonymous

    ok so this is ALL I could find in your help section on how to get my account below 50k
    “”5. What if I want to withdraw only part of the funds in my goal?

    SmartyPig does not offer partial withdrawals although we do have the option of transferring money between goals.”"”"
    So does this mean I HAVE to close my entire account as there is NO WAY to do partial transfer? ???

  • Laura

    your help section says this”"
    5. What if I want to withdraw only part of the funds in my goal?

    SmartyPig does not offer partial withdrawals although we do have the option of transferring money between goals.”"”
    So does this mean there is NO WAY to remove the part of my account that will not get at least 2 percent?? do I have to remove my entire balance on may 18th?

  • Aaron

    Lots of banks tier their interest rates. Some give higher rates for balances over a certain threshold. Others give a “teaser” rate up to a certain balance. This is not a new idea.

    If you ran a company and found that part of your operation was losing money, you’d be a fool not to tinker with it and find a way to make it work better. I’d rather see this business succeed and earn me a rate of 2.15 percent (a good .7 percent higher than I can find anywhere else right now) on up to $50K than watch it fail.

  • Laura

    still searching on HOW TO REDUCE ACCOUNT TO UNDER 50K without closing entire account! Is the answer we MUST remove entire balance? there is no partial withdraw allowed!?
    this was posted a year ago and is the same as said in your help section. “QUOTE- Mike Ferrari, Official Rep, replied 1 year ago
    @lindy,

    At present, you cannot make partial withdrawals from a SmartyPig goal. If you wish to withdraw your funds, you must stop the entire goal and withdraw all funds.

    Thanks for the question!
    I’m happy to address this question.
    The company says this answers the question END QUOTE.
    so YES OR NO… There is no way to reduce account balance below 50k??

  • Ashen

    Try opening a new goal and transfering the amount you want to leave in smartypig into that new goal and then end your old goal. that should keep you from having to withdraw all the funds.

  • Publius Piggus

    Mr. Weinshenk,

    Thank you for the transparency that your 19 April blog-update provided. Well done and as I’m sure your PR and other communication people know, it’ not what you communicate, it’s what your intended audience perceives. Continue to refine your communication strategy, especially in this time of the “well-earned” distrust in banks, and Smartypig will continue to serve their niche. With that lingering distrust in mind, I feel I just can’t trust the one good apple (Smartypig?maybe?) in the barrel of bad apples and will close all my accounts investing my money elsewhere. For those of you who stay with Smartypig, and are truly interested in saving, be very careful about letting the “shiny ring” of cash-back boosts siphon off your capitol for things you don’t need, but can’t pass up because it’s such a great deal. Think twice, act once, and good luck to all.

  • Laura

    I want to echo some of the comments regarding the interest rate changes. First, SP is a business. They do not survive if they don’t make money. And how they make money is people cashing out. They don’t make money when your house down payment sits there for a few years, earns above market interest, and then is withdrawn.

    Second, as someone pointed out, this business model is for goal-oriented savings. Yes, buying stuff. Buying stuff with cash as opposed to credit, which is what being a responsible consumer is all about.

    As for those of you putting down the less than 50k folks. Feel free to take your judgments elsewhere. I am saving up for a new mattress so I can wake up in the morning without my back hurting me. Next, I’m going to save up for a trip to Paris for my 40th birthday because I freakin’ deserve it. No, I’m not using SP to save up for a house so I can be tied to a mortgage (and house repairs, property taxes, etc.) for the next 30 years. But that doesn’t make my saving goals any less laudable or valid than yours. Grow up, stop whining, and thank SP for offering you above market interest rates for the time they did. And do us a favor–take your ungrateful elitism somewhere else. You don’t belong here.

  • Mandie

    I too am a small saver, my parents never explained the worth of a dollar to me nor did they explain the hazzards of having a credit card. I am 23 years old and have terrible credit, yes I take resposibility for my actions. I pay my taxes and do not live off the backs of the rich, however I do not have $50,000 in my back pocket. Stop complaing, those of you who have been fortunate to save large sums of money need to take a seat. I deserve the same chance as you did! You had your chance and you have done well, stop complaing, be grateful your are blessed, as well, thank SP for allowing you to be greedy for as long as you have. I am proud to be a SP member and tell all my friends and family memebers about the amazing program that helps the small people, just like it was originally desinged for.

  • Laura

    Thanks Ashen, that’s what I did today. Set-up a second short term goal for a farm truck and transfered over funds from my first goal. Now my first goal will stay below that bad rate. I’ll have to edit my first goal to say something like, “saving for 24% of the funds needed for approx.start-up costs of a non-profit farm.”
    Hope there are no issues stopping the truck goal and leaving the other goal active!

  • Laura

    lol it’s me again. just exploring ways to make my money grow. How come australia smartiepig pays 5 and 4 percent? same deal better rate, hmmm, and 100,000 au dollar max. http://www.smartypig.com.au/
    http://www.smartypig.com.au/

  • David

    I work for a bank and I know that no announcement like this does goes out without dozens of spinmiesters crafting it and tweaking every word. You decided to drop rates significantly for accounts with more than $50,000 so some clever munchkin decided the best way to sell this was to raise the rates slightly for some people and hope those adversely impacted would not notice. You just lost my business.

  • Phil

    I think this change in rates publishes big savers.As soon as this goes in to effect you can say good bye to me. What a joke.

  • Amanda

    I think some people here are a little confused about what SmartyPig is for. It’s not meant to do what some people here seem to want to do. I mean, honestly, start a non-profit farm? That sounds like it would require an awful lot of start-up money. SmartyPig is designed more for smaller goals that also correlate with their retail partners. Like a car or a vacation or even an engagement ring (Jarred Jewelers boost gift card). Why did you sign up for SmartyPig to save money for something so huge? Did you not read what the website’s about?

  • http://www.smartypig.com Mike Ferrari

    Laura,

    If you are looking to reduce your overall account balance below $50k without closing the entire goal, Ashen is correct. SmartyPig does not allow for partial withdrawals, however, you can transfer a portion of the funds into another goal and close that goal. To transfer funds from one goal to the next, click the “transfer” tab next to the goal in your account. If you have any additional questions, please send an email to support@smartypig.com or email me direct at mferrari@smartypig.com.

    Thanks.
    Mike Ferrari, SmartyPig co-founder

  • ChrisO

    Laura,

    Wouldn’t it be nice to get the interest rate of another country? Personally I would pick Brazil, because their rate is higher. But of course if I was really living in those countries the inflation rate would be different, and there would be different government rules (like what happens if the bank fails) and economics, so of course we can’t really get their rates that easily.

  • Nikki

    this is ridiculous. the whole great part about this service is seeing multiple savings goals in one place. i spent alot of time setting this up and now i have to move 1-2 sub accounts away? this completey and totally sucks – especially your spin to make this look like a rate hike. Poor.

  • really confused

    gosh. this is all so confusing.
    first of all, if my “goals” total up to more than $50,000, even if my total balance is under $50,000, does that mean i’ll get the crummy rate?
    second of all, if my total balance (or goals, whichever is the case) equal more than $50,000, do I get the 2.15% rate on my money up to $50,000, and then 0.5% for the rest? or just 0.5% for the whole thing?

  • http://www.smartypig.com Mike Ferrari

    @really confused,

    Our rate tier is based on your “saved balance” across all goals. The total deposits in your SmartyPig account. For example, if your saved balance across all goals is $50,000.01 or more, the entire $50,000.01 will earn .50% APY, effective May 19, 2010. If you have any additional questions, please email support@smartypig.com. Thank you.

    Mike Ferrari, SmartyPig co-founder

     

  • Another Option

    Rainbow Savings program at Wilshire Bank pays 3%+ on scheduled deposits.

    https://www.wilshirebank.com/public/personal_rainbow.asp

  • John

    Holy cr*p. This is worse than I thought! If you have one penny over $50,000, your *entire* balance earns just 0.5%.

    Please note: If your saved balance across all goals is $50,000.01 or more, the entire $50,000.01 will earn .50% APY, effective May 19, 2010.

  • Joe

    Wow, just found out about this today. Definatly (spell)a deceptive headline. Also Mike I appreciate you latest response, but 1 cent over $50K and you get .5% WOW.

    Glad you have POD. I guess the max I can keep in is $98k, $49 for my wife and $49 for myself.

    It was good while it lasted.

  • http://www.smartypig.com Mike Ferrari

    @Joe,

    A Payable on Death (POD) beneficiary is designated by the primary account holder and the normal tier rates and limits apply. Adding a POD beneficiary does not create new ownership of the account to make it such that the limits would be different. Your wife can certainly maintain her own SmartyPig profile, listed as the primary account holder, and earn the higher rate tier if her saved balance does not exceed $50,000. Thanks Joe.

    Mike Ferrari, SmartyPig co-founder

     

  • Jim

    After this PR nightmare for you guys, maybe you should consider a very clear and concise communication to your account holders who have $50K or more deposited. They are easily identifiable, so just send them a courtesy email to let them know exactly what is about to happen to their interest rate. Don’t flower it up with information about increasing the rate, because that doesn’t apply to them. I suspect there are many who don’t know what is coming, and I think you have a responsibility to be crystal clear with them. Mike’s comment on April 27 is really the first official clarification for those who were confused, because the original and updated post is a little murky. The likelihood that people have kept up with the comment on this post is probably pretty low. Just my $.02…

  • http://www.smartypig.com Mike Ferrari

    @Jim,

    Thanks for the comment and suggestion. And wanted to let you know that earlier in the week, we sent out a direct email communication to all our customers who had balances above $45k stating that “If your saved balance across all goals is $50,000.01 or more, the entire $50,000.01 will earn .50% APY, effective May 19, 2010.” In addition we stated “SmartyPig currently does not allow for partial withdrawals. If you are looking to reduce your overall account balance to less than $50,000 so as to maximize interest earned, you may transfer a portion of the funds from an existing goal to another goal and then close the goal(s) necessary to reduce your overall balance to less than $50,000. To transfer funds from one goal to another, please click the “transfer” tab next to the goal in your account.”

    We will continue to send this communication out over the next couple of weeks in advance of the May 19th deadline. Thanks again.

    Mike Ferrari, co-founder

  • Jake

    Guess I’m one of those low-income idiots who thought it was a good idea to get 7% off* the price I paid for the engagement ring I wanted to buy for my fiancee. Thanks for keeping us poor people down, Smarty Pig!

    *This is the % bonus you get for redeeming money with Jared for those of you who don’t ever bother with trivial little purchases.

  • http://HensofLaurel Laura

    “Amanda – April 23 2010 @ 3:38 pm

    I think some people here are a little confused about what SmartyPig is for. It’s not meant to do what some people here seem to want to do. I mean, honestly, start a non-profit farm?”" yes, Amanda some people save for a non-profit farm” The farm now a working model- runs with 30 laying hens,on small rotating lovely green grass pastures. In one year the hens have donated over 500 dozen organic eggs to food banks, rescued,vetted and rehomed 3 senior dogs and a sweet older horse. So it’s a working model, the public loves the concept. And I can’t wait untill the ” Non-Profit”farm is increased 10 fold. 5000 dozen organic eggs are a LOT of quality food for the hungry.

  • @Tom

    If you create a new goal and transfer a portion of your account (to be under the $50,000 limit), do you lose all the interest that has been accruing this quarter? Or, does that transfer too?

    thanks,
    Tom

  • Mike

    I guess I’m one of your non-preferred customers: I maintain a high balance and don’t use the redemption service at all. I was going to move another 150k in…that is, until I got your recent email informing me of the interest rate reduction. Message received loud and clear: Smarty Pig doesn’t want me as a customer anymore.

  • http://www.smartypig.com Michael Ferrari

    @Tom,

    When transferring funds from one goal to another you do not lose the interest accrual, but rather the accrued interest stays with the original goal. You are required to keep a balance of at least $25 in your original goal and the entire interest accrual balance will be paid to that original goal at the end of the quarter or when you close the goal. Keep in mind that the tier rate will be determined by your entire saved balance, so the total of all your goals will need to be less than $50K in order to receive the higher APY.

    Mike Ferrari, co-founder

  • http://www.bankaround.com Bank Around

    @Michael, Thanks for responding to readers’ comments. We all appreciate the open communication about the news that some felt misleading.

  • Mike

    To Mike (Comment # 115):

    Thanks for the link to readysaver. Just opened my account, and will soon be transferring out of Smarty Pig. Looking at the big picture, 25 basis points isn’t too much of a hit. On the plus side, no restrictions with deposits/withdrawals as you save. Thanks again for the tip.

  • Philip

    This reduction in the rate for larger balances is insulting. You obviously don’t value the larger customer.

  • Amanda

    Its not that SP does not value the savers with larger accounts. Smarty Pig was not created for you, it was created for smaller savers!!!!

  • Carol

    I have an account in my name only. Can my husband open a separate account with Smartypig and get the higher rate below $50,000 if the automatic monthly contribution comes from the same bank account-which is a joint account ??

  • http://www.smartypig.com Michael Ferrari

    @Carol,

    Yes, the rate tier is determined by the overall saved balance in a user’s SmartyPig account, not the funding source.

    Mike Ferrari, co-founder

  • Sue

    I tried to close 3 goals today. Recurring ACH Transactions to the 3 were iniatiated on May 7 and posted on May 11, but I got a message saying that I can’t close these goals until May 17. I will try again on May 17 to have this money sent back to my bank checking account. Will this money which is above the $50,000 maximum be out in time so as to not mess up the interest I will earn for this quarter?

  • Tom

    Mike — Can you transfer money out of a smartypig account to an external account without stopping the goal? If not, please explain how to transfer money out of a smartypig account to an external bank account without losing the accrued interest.

  • http://www.smartypig.com Michael Ferrari

    @Sue – Interest accrues daily and is paid to your account quarterly. If you close your goal before interest is credited you will receive the accrued interest.

    @Tom – SmartyPig does not allow for partial withdrawals. You will need to close your entire goal, if you would like access your funds. As noted above, interest accrues daily and is paid to your account quarterly. If you close your goal before interest is credited you will receive the accrued interest. You will not lose accrued interest.

    Mike Ferrari, SmartyPig co-founder

  • Matt

    Even if you earn the 2.15%, your are still losing purchasing power. Inflation eats your interest and some.

    If your putting more than $50,000 in a savings account, please go to a site that teaches you about investing your money wisely. It is very simple, with some research, to find semi-liquid funds with no load. Money markets are not hot right now so its up to you.

    By the way, I think it is hilarious that so many people complain. Considering 5%ish have 50k+, there sure do seem to be a lot of whiners who have tons of cash in savings….more than possible. ;)
    Wishful thinking does not equal real-world cash

  • Eilene

    If you have more than 50K and want a higher rate of interest…consider joining a credit union. Smartypig is geared towards people who want to stay away from credit cards…save for vacation…etc. If you’re saving more than 50k…there are other…better ways of doing it. Try laddering CDs. I mean…jeez people. It’s an online piggybank…stop manipulating it as a way to collect donations for your charity.

  • Carol Coppola Mogolov

    Once you reach a goal of $50,000 can the money sit and collect the higher interest or do you have to transfer it out ?? by the way it is better than any CD rate you will find

  • Louis

    Maureen,

    You are the one who is uneducated. Who is offering better than 2.15% for an FDIC insured savings account? Please let me know, so I can move my money. If you don’t know what you’re talking about, shut up!

  • http://x Roche

    I searched countless hours for moneymarket, CD, savings accounts to move our money to after our rates dropped from 2.5% to .5%. We are so thankful to have found Smartypig! FDIC insured and 2.15% Keep up the great work!

  • http://www.moolanomy.com/2255/how-to-choose-high-yield-savings-accounts/ Luke

    It’s great to hear that SmartyPig is raising their rate on high interest savings accounts. I hope people will enjoy this offer.

  • E

    Wow, I’ve never seen so many people with 50k to their name’s bitching! This isn’t the worst thing to ever happen to your hard-earned clams….get a little perspective! Also, no one is holding your money hostage…if you don’t like it, shop around for a better rate – that is the only thing that actually keeps banks competitive. Needless whining has never accomplished anything (worth having). Cheers.

  • Beth

    @Louis #163: Check out CD rates http://www.bankrate.com

    That took me 3 seconds of searching. If you have over $50k you should be in CDs anyway (or a Vangard account).

    Telling people to shut up isn’t very nice.

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