After criticism from customers and personal finance bloggers, social saving startup SmartyPig has dropped the $5 fee for users to contribute to other users’ savings goals.
Today, the company posted an entry on the SmartyPig blog stating:
“SmartyPig customers will now be able to make contributions to other users’ goals at NO cost if they use their existing SmartyPig funding source, i.e. your checking or savings account.”
Previously customers would have to pay $5 per contribution to another user’s savings goal. Although this change eliminates the fee for SmartyPig users making contributions to other users via a prelinked account, it will not change the 2.9% fee associated with a member or non-member making a debit or credit card contribution. As SmartyPig notes, they have to cover the cost of allowing debit and credit card contributions.
For the uninitiated, SmartyPig is a new online savings program to help users save for individual goals. Users can also share savings goals with family, friends, and other users, who have the option of contributing funds towards your goal.
While SmartyPig offers a generous interest rate, currently 4.30% (APY), bloggers reviewing the site were quick to criticize the site’s fees, as well as one glaring problem: funds saved at SmartyPig cannot be wired back to your account; they must be redeemed using a SmartyPig-issued debit card (free) or by check (for $25).
Personally, I haven’t decided what to make of SmartyPig yet; I like the idea of setting specific savings goals and sharing your savings with family and friends, but only being able to get at your funds via debit card is a major downer. I’m sticking with my ING Direct account, which lets me create individual savings accounts (goals) at no charge, gives me a free debit card, and lets me wire money to other accounts for free, anytime.
I do, however, applaud SmartyPig for listening to customers (and, ostensibly, bloggers) and for eliminating the $5 fee for contributing to other users’ goals.
About David E. Weliver
I think the generous 4.3% APY coupled with the added (up to) 5% from their retailers should be a no brainer for people who want to save up for a specific item(s). Even for a general goal in which you will eventually be spending $, this is a good deal. Bottom line for most people comes down to money. Can you make/save more with SmartyPig, the answer is yes.