Last year, I decided to become more responsible financially. Part of my plan was finding a high interest savings account to save my pennies in. I found Smartypig was offering a savings account with an interest rate of about 1.75% which was extremely high. I opened account immediately and started dropping whatever extra money I could.
Now, I understand that the amount of money I have in savings is not going to earn much interest but if I was going to have a savings account then I wanted it earning as much as possible. Smartypig also made it difficult to withdraw money because of the delays in getting money transferred back to an account I could spend from. I was very happy.
In the last year, the interest rate has dropped to 1.35% in January, and then 1.095% in June. Sadly, even at 1.095% it was still higher than most bank accounts.
Today, I got notice that Smartypig is now dropping there interest rate to a measly .698% – about half of what it was before! They are no longer competitive and I need to start looking for other options. I am not interested in their retailer rewards. I never intended on spending that money in the first place.
So now, my options are just use my Ally savings accounts at .89% or move to Perkstreet and get 2% cash back on my spending. The problem with Perkstreet is that the account is not interest bearing, and they require a balance of $5000 in order to get 2% back, otherwise it is just 1%.
I will have to do the math to see which will yield the best results. I might end up just doing both, even though I would prefer to have only bank. But considering that with Smartypig I am dealing with 2 banks anyways, it won’t be much of a difference.