Hand Dropping Coins into White Piggy BankWhen you set up an automatic transfer into your savings account with a particular goal in mind, it can be easy to lose sight of your intentions. The money that you’re saving can get lost in the shuffle of your other savings and can get used for some purpose other than what you had intended. Beyond opening up an entirely separate savings account — and dealing with the associated fees — it can be difficult to keep your savings separate.

SmartyPig claims to solve that problem with a fairly simple automatic savings plan. Rather than trying to manage savings for multiple goals in your personal account, you set up an account for your goal on the SmartyPig website. You then set an automatic transfer to your SmartyPig account and start saving. You can even set up your account so that your friends and family can make deposits into your SmartyPig account if they want to help you meet your goals.

On top of helping you automatically put money aside for a goal, SmartyPig accounts function like normal savings accounts: you earn interest on your deposits, which you receive with your savings when you meet your goal. SmartyPig offers 3.90 percent — one of the highest rates for savings accounts that I’ve seen. On top of that, when you withdraw your savings, you can opt to receive your money as a gift certificate to certain retailers. If you do so, you’ll get a cash incentive of up to 5 percent of your savings.

SmartyPig Landing Page

SmartyPig Landing Page

Think about it this way: One of SmartyPig’s retail partners is Zales. If you’re saving up for an engagement ring, you’ll not only have your savings to work with. You’ll have your interest as well as your cash incentive to help you buy the perfect rock. And SmartyPig doesn’t charge any account fees, even when you cash out your account.

If you aren’t interested in a gift certificate to any of SmartyPig’s retail partners, you can withdraw your money on a MasterCard Debit Card instead. You’re also able to move your money directly back to the account you used to set up direct deposits into your SmartyPig account. Furthermore, you can withdraw your money at any time. Even though SmartyPig was set up to help you achieve your goals, you can pull your money out of your SmartyPig without meeting your goal.

While SmartyPig sounds almost too good to be true, it’s a program offered by the very steady West Bank. It’s based in Iowa and is FDIC-insured. SmartyPig is just set up as a savings account managed entirely online and with some pretty great perks. The social aspect — the ability to share your goals with friends and family — is also a great benefit. It helps reinforce the mindset that your goal is a priority, making your automatic deposits seem like less of a burden. And if your family wants to help you towards your goals, it’s nice that it’s so easy for them to do so.

Image credit: urbancow / iStockphoto

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