As you recall, when I wrote about my experiences with SmartyPig, I found it easy to use, and its interest rate to be downright irresistible. At the time, the only thing I hadn’t done was actually meet one of my savings goals and withdraw my funds.
I had been saving up for a trip to a wedding, setting my goal of $600 to be reached on May 5. Based on my start date and a twice-monthly withdrawal (to correspond to my paychecks on the 15th and 30th of each month), SmartyPig calculated a twice-monthly contribution of $68.45.
Reaching my Goal
Smarty Pig did withdraw my contributions as scheduled, and accrued interest at the stated rate. But as of April 30, which was my last scheduled contribution before the target date, my account for this goal was actually about $2.00 short of the $600 target. I could have stopped the goal and withdrawn the balance, but chose to wait and see what would happen. This small shortage didn’t really affect me as I already planned to pay for my trip on my credit card (earning rewards points) and use my SmartyPig savings to pay off the bill a few weeks later. But if you are someone who keeps a REALLY tight budget, or the calculation is off by more than a few dollars, you could find yourself in a bit of a pickle if you were planning to withdraw the funds to make an immediate purchase.
On the next regularly-scheduled contribution date (roughly 10 days after my initial target date), SmartyPig initiated another withdrawal from my checking account. I assumed this would be in the amount of the $2.00 and change needed to reach my goal, and was surprised when SmartyPig actually withdrew the entire $68.45, thus putting my total account balance well over my original target. This isn’t necessarily a bad thing (saving more than planned is never bad), just unexpected. Again, if I hadn’t had the cushion in my checking account I could have found myself facing one unpleasant overdraft fee.
Withdrawing my Funds
Once the final transaction showed up in my SmartyPig account, I received an email telling me my goal had been reached. I logged into my account and clicked “Stop Goal” only to find that I have to wait 4 business days after the final transaction posted to make a withdrawal. This amounts to 7 business days and 9-11 calendar days after the last transaction was initiated, due to the standard ACH wait time. This was another surprise, and again something that could derail someone counting on a specific amount of cash at a specific time. Because SmartyPig only lets you withdraw the entire amount of your goal, this delay meant ALL of my cash was inaccessible, not just the amount of the last transaction.
When my wait time was over, I finally was able to withdraw my funds. I once again clicked “Stop Goal” and was informed that I could split my savings between gift cards to partner retailers (with a bonus), a SmartyPig debit card, and an ACH transfer to my own checking account. I had to press a button to continue. I was then asked if I wanted to put any amount on a retailer gift card. Say No, and you are directed to a new screen. Say yes, and you choose the retailer(s) and amount(s) of your gift card(s), then continue to the next screen. You then go through the same routine on a screen asking about a SmartyPig debit card – do you want one, and if so for how much. The next screen has you select a bank account so that you can transfer any remaining funds in your account. One last screen has you review the options before confirming your selections. I felt the multiple screens were unnecessary – I just as easily could have seen all the options on one screen and entered the appropriate amounts (or 0) for each.
As always, ACH transfers back to your bank account will take 3 business days to post. The gift cards and/or debit cards must be mailed so there will also be a small delay in receiving funds using those methods.
If you do not want to withdraw your whole account balance, you will first have to set up a new goal and transfer the amount you want to keep with SmartyPig, as SmartyPig requires you to withdraw your whole balance. Remember that you can have multiple goals within one account – you don’t have to withdraw all the money in your account, just the amount in the goal you are trying to close.
The Bottom Line
To be safe, you should set your goal to end well before your actual target date for reaching it – you should allow for one extra contribution before the date you would actually need to withdraw your money. You need a little cushion to make sure you reach your goal, time for the final transaction to post, and then time to get the money out, regardless of the withdrawal method you choose.
Knowing more about how the final postings and withdrawals work, I would be less inclined to recommend SmartyPig for an emergency fund or “just because” savings as you won’t be able to access any of the amount if there happens to be a contribution in progress. As long as you plan for these contingencies, I still recommend SmartyPig as an excellent way to save for targeted goals with specific end dates in mind – just make sure you give yourself a little time cushion if the exact amount is vital to your financial stability!