I’ve been dying a little inside every time I check the interest rates available for accounts nowadays. In my heyday, CD rates were as high as 7.1. Now you’re lucky to find 1.4% out there somewhere. And checking and savings accounts? Forget about it. You’d be insanely lucky to get 1% on those. These are sad and hard times for those of us that like to put our money away for a rainy day, expecting it to grow while it sits there. But worry not, savvy investors. Hope is here.

 SmartyPig offers 2.15% APY!*

 *2.15% is offered for collective balances under $50,000. If you go over that bar, they’ll drop your collective interest rate to .5%. So if you’re looking to store away more than half a grand, you can probably find a better rate. Of course, as is every bank’s prerogative, rates can change without prior notice. After my 5 months of using them, they’ve only changed once, and that was to scale up to this current rate.

SmartyPig is a specialized saving program designed to help you set financial goals and reach them. They operate through West Bank, an unfortunately-named group of banks in Iowa. They’re legitimate, and they won’t steal your money.
One thing that’s going to deter some of you from working with them is: they’re an online banking service. That means giving very private financial information over the Internet, then turning around and giving these strangers your money! For the younger generation that’s more trusting (understanding) of technology, this might be fine. But the older, weathered generation that’s heard too many stories of other peoples’ identities being stolen will be wary to trust this type of service. And that’s completely understandable. You SHOULD be wary of giving out your financial info to people online. I can’t wave a magic wand and make all your concerns disappear. But I’ll tell you this: several financial bloggers have mentioned this service, and some have even used it. And these aren’t the type of bloggers that take payments to pimp services they don’t think are worthwhile. Also, as their site will show you, they’ve done EVERYTHING they can think of to secure the data. You’ll get an HTTPS connection before you even start entering personal data. They’ve got TRUSTe Certified Privacy, VeriSign Secure, and McAfee SECURE with a regularly updated security test date shown right on the site. They take your privacy seriously, and have gotten every security check they could readily find to make you feel more comfortable.

 SmartyPig works a little differently than a regular savings account or even a CD. Their idea: if people have problem setting financial goals, we’ll do what we can to help them reach that goal. So they’ve set it up with that plan in mind. After you’ve created an account on their site, you can start setting up financial goals. I have two running right now: one for a future vacation and one for a down payment on a house. For each goal, you enter a name, you say how much it is you’re trying to raise for this goal, & you say how much and how often you want to contribute to this goal. To help with this, SmartyPig has a built-in calculator that factors in interest earnings to help show you how much you’d need to store away monthly/weekly/bi-weekly to reach that goal in time. Of course, SmartyPig has to get the money from somewhere. You’ll need to have a bank account for it to link into. How else could it get the funds in the first place?

 Now just because you tell them you want to save $7,500 for a vacation a year away doesn’t mean that things won’t change between now & then. Something can and will happen, and you might not be fully prepared for it. SmartyPig lets you adjust any of these figures at any point, including lowering your goal to your balance and withdrawing it. Now remember: this service is built for reaching goals over time. Because of this mindset, they’re able to give VERY nice interest rates, thinking that they’re going to get to keep your money for awhile. As such, they’re also a little slow to move funds around. There’ll be a delay of a few days for any money movement to happen. Heck, even though I told it to auto-withdraw from my paycheck every other Friday, the transactions getting the money TO SmartyPig still don’t go through completely until the following Tuesday.

 So now you’ve been told their setup. You’ll have to share financial data and let them hook into your bank account for whatever regular withdrawals you set up. But there’s still one big looming question: HOW DO I GET MY MONEY BACK? And that question has many possible answers.

They can:

-Transfer the balance of the reached goal right back into your linked account. Trustworthy and simple. Probably the option I’ll go for the first time.

-They can issue you a SmartyPig MasterCard® debit card. This provides you some security while spending your money. They’ll mail you a debit card (takes 10-15 business days to receive), and a few days later you’ll get the PIN number. Activate it at an ATM of your choice, and now that card is yours to use to cover WHATEVER/WHEREVER MasterCard® is accepted. If you lose the card or it’s stolen, they have numbers you can call anytime of the day to get it locked and a new card sent to you.

-OR you can get up to a 12% bonus on your savings total by getting the money back in the form of a gift card to a specific service! They’ve teamed up with Amazon, American Airlines, Babies ’R’Us, Barnes & Noble, Bass Pro Shops, Bed Bath & BEYOND, Best Buy, Cabela’s, GameStop, GAP, Home Depot, iTunes, Jared jewelry, Kmart, Kohl’s, Macy’s, Overstock.com, Sandals, Sears, Staples, Toys “R” Us, and Travelocity to add value to your wise savings. So if you saved up $2,500 for a boat, they’ll send you a retail card with… *math time*… 2500 * 1.06 … carry the two…. $2,650! That’s pretty much a free $150, just for using SmartyPig to save for that boat. Note that I have no fricking clue how much a boat costs. Maybe they’re much more expensive than that, and all you could buy with $2,650 is a shiny anchor chain to connect to your boat. No idea. Not in the market for a boat. But the example still works! The actual bonus rates range from 2-12% depending on what you’re looking at.

 Well, I think I’ve gone on long enough. For more information, visit their site or drop some comments and I’ll try to answer as best I can. Of course, I’ll likely be going to the site to find the answer too… Oh well. Save smart. Spend smart. S-Mart.