Crank Up Your Money Saving Goals With SmartyPig

SmartyPig Review

One of the more interesting and innovative ways to save up for specific goals is to make use of SmartyPigSmartyPig is a free online savings tool that allows you to save for for specific financial goals. Whether you want to save up $500 for back to school shopping, or $5,000 for a family vacation, it is possible to use SmartyPig to reach that goal.  The concept is fairly straightforward, and works simply.

First of all, it is important to note that SmartyPig is not a bank. SmartyPig accounts are held through BBVA Compass (As of Aug 1st, 2010 SmartyPig account will move from West Bank to BBVA Compass, the 15th largest bank in the US).  They are FDIC insured for up to $250,000 (drops to $100,000 on January 1, 2014 unless things change).  You can set up as many goals as you want for yourself and your family.  In order to start at SmartyPig, you need the same items that you would need to open a regular savings account:

  • State issued ID (or driver’s license)
  • Social Security Number
  • Current address (plus previous address if you’ve moved in the last two years)
  • Email address
  • Birth date
  • Phone number
  • Checking or savings account information to fund SmartyPig

You also need at least $25 to begin funding your account. Your maximum is $250,000.  Once you have everything set up, you enter your goals.  Then, you can fund your account with money from checking or savings.  Linking your bank accounts to SmartyPig can make it simple to transfer money for your goals.  You can also use a credit card to fund your savings goals, but this is not something I would recommend.  Friends and family can also contribute to your savings goal easily (great way to get family involved in college savings goals!), and you can help others with their goals.  When you are ready, you can withdraw money from SmartyPig.  You can withdraw money to a debit card, bank account or retail gift card.

Advantages of SmartyPig

The three main advantages of SmartyPig are the high yield on the account, the cash boost you receive when you withdraw your savings to a retail card, and the ability for friends and family to contribute to your goals.  Currently, SmartyPig offers 1.75 % APY, which is more than you will get at a lot of online and offline financial institutions, even for high yield savings accounts.

The cash boost allows you to get more when you take advantage of retail gift cards.  If you withdraw $500 to a retail gift card, you receive a bonus of up to 14%, so you end up with $60 extra.  That’s free money on your gift card!  Retailers include Macy’s, Amazon, Kmart, iTunes and more.  This is great if your goal is to save for holiday gifts or a birthday, for example.

You can socialize your savings goals. With SmartyPig you can create widgets to post to places like Facebook or your web page.  You can also integrate your account with places like Twitter so friends and family can see how much you are contributing.

There are other advantages to SmartyPig. You can access your account from anywhere, including your cell phone, and SmartyPig can be integrated into your money management applications.  You can easily track your savings, and you can make automatic contributions to simplify the process of saving for your goals.  Also, you can split up your savings goal redemption among a debit card, retail card, or bank transfer.  This way the money can be used in your best interests.

Drawbacks of SmartyPig

There are some downsides associated with SmartyPig.  First of all, the fact that you can use a credit card to fund your savings goals can defeat the purpose if you get impatient to see your account grow.  The 1.75% interest you are earning at SmartyPig does not come close to overcoming the high interest you pay on your credit card.  Another issue is that once your saved balances across all goals reaches $50,000, your APY drops to 0.50%.  So the efficiency of SmartyPig drops if you are planning to save up large sums of money.

Also, you can’t partially withdraw funds from your goals.  Say you want $100 out of $500 that you have saved so far.  You can’t do it without closing out your goal.  The point of this though, is to make sure you actually keep to your goals rather than use the account like a regular savings bank (this is actually a good thing but you need to be aware of it).

Bottom Line

SmartyPig is great for short term savings goals. You can earn a reasonably high rate of return, and you can get a cash boost if you withdraw your money in the form of a retail card.  This makes SmartyPig great if you have a plan for spending your money in the next two to four years.  SmartyPig can also be helpful if you want to get a higher yield for your cash — as long as you move your cash out of SmartyPig and into some other product (like a jumbo CD) before your balance reaches $50,000.

SmartyPig can be a great tool to help you reach your money saving goals!

As always, you should check the fine print before opening any account to make sure the account is right for you and you understand all of the details.

Have you used SmartyPig?  What do you think of it?

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Published or updated July 14, 2013.


  1. Ya man, SmartyPig is pretty cool. I love how their site is designed and the way goals are set up. I’m still on the fence about creating goals and moving all of my money as I have a similar interest rate at an online bank I already use but it’s very tempting and helpful for goal completion/motivation.

    • I don’t know if I would move all of my money but if you have a specific goal it’s a nice place to put your money for the goal.

  2. Yep, I’m a Smarty Pig fan. As soon as our car is paid off this month, we’ll be starting our emergency fund and tax fund with them again. 🙂

  3. I’ve been meaning to try SmartyPig out myself, as the benefits sound really great. I think your review will help push me over the edge to give it a shot.

    One side note, I may be wrong, so I’m going out on a limb here, but I believe your statement, “Plus, SmartyPig compounds interest daily, so your money grows faster.” could confuse people. As I understand it APY already takes compound rate into it’s calculation. Therefore, two competing banks with the same APY but different compound rates would give you the same yield.

    • If you sign up let me know how it goes!

      You know, I think you are correct. I’ve edited that part out. Thanks for catching that.

  4. So you have to set a savings goal? You can’t just leave the money in there to accrue money?
    Does the gift card rule apply to pre paid Visa card?

  5. I can see Jesse’s point of view. Is it really advantageous to use SmartyPig if you can get the same interest rate from a savings account? I like the fact that you can set aside funds for certain goals like paying off a car though.

    • I don’t think many savings account offer up that good an interest rate these days. If you have one then that’s great and by all means use it.

      I think a major purpose of SmartyPig is savings for goals and making your goes public to both stick to them and allow others to contribute. These are factors you don’t readily see in other savings accounts. SmartyPig doesn’t work the same as a savings account; it’s more of a savings tool.

    • Yeah, ffb is absolutely right. Even if you’re getting the same savings yield at another bank, the key advantage of Smarty Pig is the psychological benefit of having a concrete “goal” and being able to share it with friends and family. So even if they’re not nagging you to stick to it, you still feel a sort of pressure to get it done.

      All around, I think it’s a brilliant idea.

  6. Hi, I’ve been thinking about opening an account for a new car and for some other goals. Any idea how long the high interest rate will be in effect?
    Thanks, Barb

    • According to the site’s fine print the rate can change at any time. But from what I’ve seen SmartyPig has kept their rates relatively high and steady and have even raised their rate recently when many banks are lowering their rate.

  7. This is an interesting concept. I appreciate the review. The account sounds like it requires minimal work to set up and has the potential for high yields. One consideration I always have now is the hassle factor of setting up such an account. For example, I have multiple accounts at 5 different banks. In the past, I use to chase interest rates. Now I just don’t bother anymore because the difference in interest is not worth the effort, and there is no promise that the rates will stay high anyway.

    • It can be a pain to keep track of accounts. And yes, rates can change. But I think the real focus of SmartyPig is in creating and working towards a goal. I don’t think they want you to use the account like a regular savings vehicle. If you are looking for a place to save for a goal and you like that you can make that goal social then SmartyPig is definitely a place to look into.

  8. It’s going in my link round up tomorrow- too good an article to pass up! Best, Barb

  9. They look really cool but sadly being a UK resident I can’t use them.

    Luckily I don’t have too much going on to have to set up lots of seperate goals and thing right now so my simple UK account is doing fine…. I am sure though once I have some basic savings established and things that I will want to find a service much more like this to plan life goals and whatsnot!

  10. There are some loopholes for accounts greater than $50K earning 2.15% and withdrawing funds out of a savings goal:

    Smartypig recommends that you separate the funds into amounts under $50K. Also, if you want to move a certain amount of money out of smarty pig, they recommend that you create a new goal within an account and transfer the amount you want to move out of smartypig into that new goal. Then you close the goal and the money will be ready to transfer out of smartypig.

  11. SmartyPig sounds great! Too bad it’s only available to U.S. residents.

  12. Dorothy @ Family Vacation Ideas says:

    Very interesting :)..But unfortunately it is not available in my country.
    Great review 🙂

  13. can I set up a goal and meet the goal in a week? if so, I can use the money to buy gift cards and use the gift cards to buy what I need in regular bases.

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