SmartyPig vs INGDirect/CapitolOne360

April 19, 2013 7:32 AM

So, I just found out about SmartyPig, which offers a 1% APR. I've been using INGDirect (now Capitol One360) as my primary savings account for years, and while I've been generally happy with them, they only offer 0.75% APR. Are there downsides I'm not seeing to switching over to SmartyPig? Have you had excellent/terrible experiences with either of them that would lead you to recommend or vehemently oppose their use? I'm not sure if it makes any difference, but my checking account is with BBVACompass, who's the bank behind SmartyPig. Any insight would be much appreciated!
posted by csox to Work & Money (9 answers total)

Best answer: To get your money out of SmartyPig you have only 2 options: transfer part of the amount to a SmartyPig debit card (limit 1 transfer per month) or close out the goal and transfer the entire amount to the bank account you used to initially fund the SmartPig goal. It also looks like even though they are operated by the same bank, you can't link a SmartyPig savings account to a checking account for instantaneous back-and-forth transfers like you could between, for example, a CapOne 360 checking and CapOne 360 savings account. It's all ACH transfers, which take a couple days.
posted by drlith at 7:56 AM on April 19, 2013

(I meant to say the only 2 ways to get your money out of SmartyPig in the form of cash money...there's also the option to close it out in the form of gift cards)
posted by drlith at 7:58 AM on April 19, 2013

Which may be a feature, not a bug. Its hard to get your money--I haven't touched any of the money I have put into there. Which I like!

I'm happy with them.
posted by MisantropicPainforest at 8:09 AM on April 19, 2013

Best answer: I've been using SmartyPig for years and love it. I too consider it a feature that you can only close out all at once. I recommend setting up multiple goals in different amounts so you can still get some if you need to. For example, have one that's a couple hundred bucks for a rainy day, or enough for a plane ticket or something like that, separate from your main chunk of savings. (There's also no penalty for withdrawing, so in a pinch you could — and I have — just withdraw it all, then redeposit a few days later.)

Emergency withdrawals aren't an option though so just be aware of that. You do have to wait 3 days in order to get your funds out. Still, better than a CD!
posted by annekate at 9:38 AM on April 19, 2013

For every $10,000 you have in the bank, an extra 0.25% APR gets you $25 per year. Then you get to pay taxes on that, so let's call it $20. For most people it's not worth switching banks for that. If you have five figures in savings that you don't need access to, look to CDs for higher rates.
posted by payoto at 9:44 AM on April 19, 2013

Best answer: I'm a long time ING Direct customer and I've had no complaints with them. I've never used SmartyPig though so I can't compare directly.

I was coming in to say something like payoto, though - it is probably not worth switching your entire financial house around to gain a quarter point in interest. If you look at compounding, your initial $10K would early you about $600 extra dollars in the higher rate account over 20 years. That's not even $30 a year. It may seem like a minimal hassle to make the switch right now for however many hundred dollars over the years, but ask yourself: what if CapitalOne 360 raises their rates slightly faster when interest rates start to go up generally? Are you going to switch back? It really doesn't seem worth the hassle; your time would probably be better spent crafting a long-term investment strategy (assuming you even have more saved up than 3-6 months of expenses).
posted by Joey Buttafoucault at 10:19 AM on April 19, 2013

I switched from ING Direct when they joined Capital One, but otherwise had no problems (I just loathe Capitol One). I ended up with Ally (0.84% APR) which I have loved so far, fwiw.
posted by getawaysticks at 10:26 AM on April 19, 2013

BBVA/Compass thing matters in that your balances at both places would be added to determine your FDIC coverage balance. But that limit is 250k. So as long as you are below that its irrelevant.
posted by JPD at 10:56 AM on April 19, 2013

Response by poster: Thanks all...it's definitely a feature for me that it's slightly more difficult to get my money out. Joey B, good point about the hassle. I'll probably end up keeping the bulk of my savings at ING/Capitol one....but I do have some smaller goal-oriented accounts (that I use to save up for car insurance/taxes/etc) that I'll probably switch over to SmartyPig. I realize the .25% isn't a lot, but sometimes, every little bit helps...and makes me feel more productive, so I'm less likely to pull the money out for something other than it's intended purpose.
Thanks again for everyone's input!
posted by csox at 2:06 PM on April 19, 2013