I found a savings account that earns 3.90 percent APY. And the icon’s even better than ING’s orange orb.

It’s called SmartyPig. And besides having a slightly higher interest rate, the site helps you save for a specific goal and use peer pressure to stay on target.

Here’s how it works: make your account public, so family and friends are aware of your savings goal. Then run your own pledge drive and suggest that they contribute just $10 a month and receive this great travel mug (sorry I’ve heard so many pledge drives the language just pours out of me), fund your IRA, or buy a new bike.

Opening an account is free; the only charge I could find is if you want to contribute to the account via credit card– then there is a 2.9 percent fee. But I wouldn’t suggest that.
If you don’t want to share your goal with friends or family, you don’t have to. But I’d advise it since I’ve successfully exercised 4 times a week for 6 out of 9 weeks thanks to Stikk.com, a web site that encourages putting your goals where your money is.

Yes, I failed this week because it was my college reunion, so Scott who read my first Stikk entry will soon be $20 richer. But is it really a failure when I ran 5 miles on Sunday, a feat I never would have attempted before putting my money on the line and telling my readers about it? I don’t think so.

When you reach your savings goal on SmartyPig, you can either get a debit card or purchase gift cards from retailers.

This is where I see a flaw. What if you want to save for retirement or a car? You can receive a check in a week, but that fact is buried in the fine print. The advertised redemption methods seem to ultimately encouraging spending the money on stuff at the mall.

Then again, if this social-networking-meets-saving site encourages more people to save to buy something instead of charging it, that’s a start.

This entry was posted on Monday, June 9th, 2008 at 5:52 pm and is filed under saving. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.