SmartyPig Online Savings Cuts Interest Rates To 1.75% From 2.10%

SmartyPig, a firm that offers goal-based online savings accounts, announced on its blog that the yield will fall from 2.10% APY to 1.75% APY for customers with balances up to more than $50,000 on Tuesday, September 7th.

Based on the company’s FAQ, the APY is determined by BBVA Compass, the company’s bank partner. As of now, BVA Compass has low rates on most of its deposit products.

“As you may know, interest rates on deposit accounts at many banks have been declining over the past several months due to poor market conditions. Likewise, the rate on your SmartyPig savings account is being reduced as a result of these same economic conditions. Effective Tuesday, Sept. 7, 2010, the interest rate paid on SmartyPig savings accounts with $50,000 or less in aggregate balances will decrease to 1.75% APY (balances of more than $50,000 will remain at .50% APY),” SmartyPig said on its official blog.

SmartyPig stated they are still offering the best interest rate compare to its competitors and with the company’s cash back offerings of up to 14% with top merchants.

Interest rates on SmartyPig savings accounts will continue to be among the best in the market. And with our cash back offering of up to 14% with top merchants customers will have “the opportunity to get the most for your money when you use SmartyPig.”

“We understand that a rate reduction can be unpopular. But we also understand that with many banks introducing creative new fees, low-to-no interest rates on savings, high interest rates on credit card debt and scant rewards for your spending dollars, the SmartyPig savings account beats them all hands down. We all have to tighten our belts during these difficult financial times,” SmartyPig said.

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