Anyone using SmartyPig?

[amyschiff]

A while back there was a contest for a $100 gift for using SmartyPig. Has anyone since started an account with them? If so, what are your thoughts? Do you like the service?

[Mary Webber]

Wait! Wait! I missed the original posting... what IS SmartyPig? Why would I use it for?

[amyschiff]

SmartyPig is a goal-oriented online savings account. You tell SmartyPig how much you want to save up (and what you are saving it for) and they suggest how much you put away each month and help you set up automatic transfers to help you reach the goal. You can also make your account "public" so that family members can help you reach the goal.

I think the catch is that you are required to set up automatic monthly transfers. The idea is that the money is set aside before you even have the chance to spend it.

[Mary Webber]

What a great idea, but exactly who is running this? An online bank? I guess I'm really cautious about authorizing automatic transfers, but this does sound like a really useful idea. I, too, will be interested to hear from someone who's used/is using it.

[amyschiff]

I would liken it to something like ING direct. It's an FDIC insured account, but it's not a division of a big bank or anything.

[ericabiz]

I received a $50 gift card to SmartyPig, but I haven't used it.

I read the fine print and there's a lot I don't like. First, you have to authorize automatic debits every month until you meet your goal. You can't stop them at any time.

Second, it pays a high interest rate, but the interest rate doesn't appear to get paid out when you cash out the account -- it accrues quarterly. (Hopefully someone from SmartyPig can clarify this further.) If I cash out my account, I want the interest, too.

There were just too many weird things to make me consider it. But I may use it sometime in the future to buy something small.

-Erica

[Mary Webber]

Hmmm... Are there other programs available similar to SmartyPig so we can compare them? I'm not liking the sounds of what Erica's discovered, and I'm very leery of authorizing any automatic debit. Or is this just me?

[amyschiff]

The requirement of automatic debits is what turned me off too, especially if you have an emergency of some sort. I don't like having money tied up like that. For a few months I had automatic debits from my checking into my ING direct savings, but after fixing my car, my funds were lower than usual. I needed to have the ability to stop automatic transfers for a while or I could have gotten into a lot of trouble.

I think the site really only benefits people who have a specific savings goal and have the funds, but are just bad at saving on their own. I could see using it in addition to a normal savings account but definitely not exclusively.

I read the "About" part of their website and they made it seem like there really weren't any similar sites out there-- ones that incorporate goal-oriented savings with the social aspect.

[finvik]

My sister has been using SmartyPig. and she says smartypig is Social banking application. she has always been praising this SmartyPig. i read somewhere that it is a cool way for parents who seriously want their children to learn great financial habbits. but what i found that their claim that you should not save before or for buying something expensive!

Vik

[Mary Webber]

I'm with you, Vik, in wondering about advice that you NOT save, whatever reason is given. As to teaching kids smart money skills, I can think of many other ways... Maybe we should start a thread on THAT!