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SmartyPig Review - Online Savings Account on (Pig) Steroids
SmartyPig Review - Best Online Savings Account
One of the most effective tools I’ve discovered for helping you plan for large purchases, goals and dreams is SmartyPig, a free online savings account backed by BBVA Compass that lets you create individual goals that act as sub-accounts, and control how much each month is automatically transferred from your checking account.
For example, my wife and I are saving for a trip to Croatia in June of 2012. A few months ago I set up a SmartyPig goal of saving $1650 by June of 2012. To achieve this, SmartyPig pulls $150 out of my account once per month.
So why use an online savings account instead of your current bank, or an actual piggy bank?
The benefits of using an online savings account like SmartyPig include:
- Ease of Use
- Good Interest Rate
- It’s Fun (and free)!
Why Use SmartyPig?
Ease of Use - SmartyPig makes it easy to set a savings goal and forget it. Setting up the account was easy, and building and managing savings goals is also a snap. Your goals are displayed as individual piggy banks showing the percentage you are toward achieving your savings goal.
Once per month, or whenever you choose, an automatic transfer from your main bank account to your SmartyPig account will occur. This makes saving easy because it allows you to harness the power of time to reach big goals without having to remember each month to do so. Plus, the fact that it happens automatically makes it seem more like a bill I must pay, rather than an optional activity. This has forced us to pare down spending in other areas, making our goals cost neutral.
One financial guru I follow, Ramit Sethi, has written extensively on automating your finances, and the benefits it can provide for your life. When we are busy, it is easy to forget to tend to our finances, and SmartyPig makes it easy to set it and forget it.
Good Interest Rate - If SmartyPig did not have one of the best savings account rates out there, something they have achieved by pursuing an online-only model that reduces their costs, then I wouldn’t be talking about it today. Their current average beats most bricks and mortar banks, as well as online banks. And because ING Direct was sold to Capital One, making it a less appealing option for those fed up with the big banks, SmartyPig is poised to grow and become even more competitive.
Though the interest rates on savings accounts these days are small, they are better than nothing.
It’s Fun - With its pink motif and piggy bank icons, SmartyPig is definitely trying to set themselves apart from the boring world of online banking. The interface even impressed my 6 year old daughter, and I was able to teach her some things about saving when I had her attention.
One of the unique features of SmartyPig is the ability to share goals through social networking sites like Facebook and Twitter. This makes it even easier for family across the country or around the world to contribute to goals like your child’s college education or birthdays. You can also share your progress towards goals like retirement or that fancy European vacation, which can serve as a motivator to keep you on track.
Plus, it’s just plain fun to log in each month and see my pigs growing.
Open a SmartyPig Account Today
Whether you plan to put a few dollars aside each month to minimize the sting of Christmas shopping, or are saving long term for a college education, SmartyPig has what you need to help you reach your goals while encouraging smart financial behaviors.
I tell everyone I know that any annual expenses over $1000 such as insurance bills, vacations, tuition, and Christmas gifts are best saved for by putting the smallest amount away each month over the longest period of time possible. This frees up more of your monthly income to go towards paying down debt, and prevents these expenses from derailing your monthly budget.
IF YOU WOULD LIKE TO RECEIVE AN INVITE TO OPEN A SMARTYPIG ACCOUNT, LET ME KNOW IN COMMENTS AND I CAN SEND YOU AN EMAIL CODE.
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