Need to save for a big ticket item? Can't seem to be able to do it, well SmartyPig claims to be your answer. With SmartyPig you set up automatic withdrawals from your checking, or savings account to fund your Smartypig account. As you save over time you earn interest on your balance. SmartyPig claims to offer a higher interest rate than a regular savings account without charging any fees. SmartyPig can be used if you want to buy a big ticket item and can wait six months to a year for it. The longer the time frame the better as you will earn more interest over time. If you want the item in the very near term, Smartypig would seem to be of no benefit.
SmartyPig officially launched in April of 2008. Mike Ferrari and Jon Gaskell founded the company. Ferrari is a Web designer who worked for The Integer Group. Gaskell was a media professional and former owner of CityView and Pointblank. They financed the company with their own money and investments from family and friends. West Bank a bank chain in Iowa has an equity stake in the company. West Bank is a 115-year-old publicly traded financial holding company.
It is free to open an account with SmartyPig. There are no account fees, you earn interest on your deposits, and balances are FDIC insured up to the maximum allowed by law. To open an account, a deposit of at least $25 is required. The minimum savings goal is $250, and the maximum is $100,000. SmartyPig accounts are held at West Bank. SmartyPig also undergoes regular financial and security audits.
The concept behind SmartyPig is you to set up savings accounts for specific goals. You let SmartyPig know what it is your saving for and when you want to reach the goal. Once your account is set up SmartyPig will suggest a monthly contribution. This is a required debit from a predetermined funding source such as a checking or savings account. You can make you account public so others can also contribute to your financial goal; for example someone may choose to make a deposit as a birthday gift to you. These deposits accrue interest. The interest rate is determined by West Bank. The APY may be changed without notice. Interest accrues daily but is posted quarterly. If a savings goal has a time frame of less than a quarter, I am unsure if the interest is paid
When you’ve reached a savings goal, SmartyPig will either issue you a debit card, a retailer gift card or transfer the full balance to a bank of your choice. SmartyPig has partnered with top retailers like Best Buy, Sears, Home Depot, Macys and Sandals to name a few that will give you up to an additional 5% discount for making your purchase with them.
If you want to save for multiple items. I sugguest setting up multilple accounts. An account balance can not be split up. If you want to get the retail gift card savings you will have to get the full balance on a single gift card. You can get the balance in cash if you tranfer it back to the original funding source. However if the goal is to save for a specific item or items and you can buy it through a SmartyPig reatil partner, you should and get the additional discount.
SmartyPig seems like a good idea for someone who lacks the discipline to save on his or her own, and also has the extra money to save on a monthly basis. If you think there may be a month you won't have the contribution available, SmartyPig may not be for you.
To learn more you can vistit SmartyPig and West Bank
http://www.westbankiowa.com/
http://www.smartypig.com/
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