SmartyPig Review: The Piggy Bank of the Future

I’ve been using SmartyPig for over a year now and I recently completed a goal so I think I have some good insight into this revolutionary service. The basic concept is similar to a piggy bank. Save up for something we need or want to buy. So instead of using credit cards or debt to pay for something, how about paying cash for it? What a concept. It’s something many people can’t grasp and are the exact people who are in trouble today.

This is what I teach. This is what the Bible teaches. Live debt free. SmartyPig can help you.

The reason SmartyPig works is that it makes saving automatic. All you have to do is to set a goal and set the date you want to accomplish it. SmartyPig will automatically calculate your monthly contribution plus interest that it would take to fulfill your goal. You can add money in addition to the monthly amounts at any time. They’re currently paying 2.01% which is pretty high compared to most savings accounts. Interest accrues daily, but is paid quarterly. When I started, the interest was at 4.30% which was high back then. Their rate is still competitive in my opinion and management has expressed that they want to stay competitive with their interest rate.

Once you’ve set up your goal, monthly recurring amounts will be transferred into your SmartyPig account. Once you’ve completed a goal or you’ve decided to stop a goal, they will allow you to do 3 things with it. You have a choice between transferring your money back to your linked account or receive a SmartyPig debit card, or receive a gift card from participating retailers. Honestly, I would probably just transfer the money back into my linked account. That takes 2 business days. I probably wouldn’t even consider the debit card as it takes 10-15 business days and it’s not the same as cash even though it can be used for ATM withdrawals.

The other option only makes sense in certain cases. If you had something specific to buy that you know you can get at one of SmartyPig’s participating retailers, it makes sense. The great thing is that the retailers are offering a percentage boosts to your money. Current retailers include Amazon (1.75% boost), Best Buy (0.75% boost), Home Depot (1.00% boost), Lowe’s (1.00% boost), Macy’s (3.75% boost), Overstock (6.00% boost), Sears (2.50% boost), and others. As you can see, you can get a better deal if you get a gift card, but it only makes sense if you’re sure you can get the item that you’re looking for at a great deal. It can take 7-10 business days to receive the gift card.

Not only is SmartyPig a virtual piggy bank, they’ve also made it social. You can share goals with family and friends and they can contribute to your goals. Funds that are added by credit card are charged 2.9%. However, if they have a SmartyPig account, it’s free to send money to family and friends as long as it’s from their SmartyPig balance.

The other great thing about SmartyPig is their willingness to listen to the customers. I have seen many changes that have come about because customers have complained. For example, in the early days, people were complaining because there was no option to transfer the money back into the savings account. A recent change that has come about is reduced ACH transfer times. It used to take a little longer and they’ve recently sped the process up. The company is very accessible through their blog as well as email.

The account is free to sign up and is FDIC insured up to $250,000 (until the end of 2013). You must be 18 to open an account and the process doesn’t take long at all. You’ll pick your user name, password, security questions, input your personal and bank information, and verify your account.

Now I wouldn’t use SmartyPig as a traditional savings account. Because it’s not. It’s not quite as liquid as a regular savings account. So don’t put your emergency fund there. If you need to save for a specific goal, however, SmartyPig makes a lot of sense. Next time you want or need something, think SmartyPig. Whether it’s a new car, a new washer, a family vacation, Christmas money, or even a wedding, give SmartyPig a try. It’s made saving automatic and fun. I just bought my MacBook Pro without using my credit card because I saved with SmartyPig! I can’t wait until it arrives. Remember, debt free is the only way to be!