Dropping rates too often. Bad Business

I'm sorry, but let's stop and think about this for a moment Emilie.....you are not losing any money at all! In fact, no matter what the interest rate is, you are MAKING money! Like most people, I would love to have my money earning much higher interest, but considering the shape the economy is in right now, I'm happy to earn any amount of interest.

1) Some people are complaining about interest rate changes which aren't coming often enough! Complaining about a large jump down in interest rate percentage, all at once instead of smaller drops spread out, seems like a silly thing to worry about. Had the rate been lowered more often, you'd end up with less returns over the same period of time. I for one am thankful that the folks at SmartyPig waited as long as they possibly could to make the changes.

2) According to Bankrate.com today:
SmartyPig is at 2.01%
AIG is at 1.71%
E-Loan is at 1.55%
FNBO is at 1.50%
State Farm is at 1.17%
Bank Direct is at 0.1%

How in the world are you guys seriously complaining about Smarty Pig's rate
(which has a better website, with better features, unique social savings, and the ability to save for specific goals...) when their rate is so much higher than these huge (and hugely popular) conventional banks!?!?!

3) I for one... am staying with the Pig. In simplest terms, it still has some of the most competitive savings rates in the nation, it gives me features and usability which simply can't be duplicated elsewhere.

With the most recent rate cut, SmartyPig's inability to move money between goals or partially cash out completed goals is no longer worth the small rate difference when compared to other online banks. I'll currently only lose 0.3%* if I switch to an online savings account elsewhere (no fee/no min), plus I'll be able to reorganize goals without being forced to place my savings into a 1-2 week round-trip limbo between SmartyPig and my checking account, receiving concerned calls from my local bank as these large deposits and withdrawals occur. I think this hassle and inflexibility is worth a little more than 0.3%*.

This was only a mild source of irritation when I first commented on it here, and with Mike's responses that this would be fixed "in the near future", I decided to wait it out. Many months and rate cuts later, I've decided that I'd be better off placing my savings somewhere else, so that I can truly organize my goals on my own terms, at least until SmartyPig's current problems are eventually resolved. Goodbye.





*Actually, SmartyPig goals in their current form are better compared to Ally Bank's no-penalty CD, where you can break the CD with no fee, but you have to extract all principal+earned interest at once. They're only 0.15% down from SmartyPig, and I wouldn't even be forced to redeposit all the money straight back into my checking account.