SmartyPig Eliminates $25 Check Fee

It seems that SmartyPig continues to improve its service to lure more customers.

After reducing most of the fees they charge savers for their services shortly after launching the site, SmartyPig also eliminates the $25 fee for requesting a paper check yesterday. Previously, when account holders reach their saving goals and wish to get the money they have saved plus interests, they can either redeem it for a debit card or a SmartyPig gift card at no additional cost. If they, on the other hand, want to get cash, then have to request a paper check be sent to them, but that will cost them $25 processing fee.

Over the weekend, an email from SmartyPig announced that they are eliminating the $25 check fee.

Requesting funds on a check in lieu of placing funds from a Savings Goal on the SmartyPig MasterCard Debit Card or Retail Gift Card is free. To complete this transaction, the Primary Account Holder must contact SmartyPig Customer Support. Not available to minors. Waived when required by law.

This’s a good news for users for sure. However, I still feel that this “requesting funds on a check” thing is not necessary. SmartyPig already allows savers to make contributions to their goals via a linked savings or checking account (ACH transfer) and since a user must deposit at least $25 every month into the SmartyPig account once a saving goal is established, it’s quite natural to fund the account via ACH instead of other methods to avoid fees. If most users are using ACH anyway, why can’t they just transfer their money to their bank accounts via ACH? What’s the reason SmartyPig insists on issuing a check?

Also, while the recent changes are more favorable to users, they somehow didn’t make me feel very confident about their service, though we can always view these changes as the company trying to address users’ concerns. What if later on they find that by reducing or eliminating fees, they can’t make enough money to sustain their business, especially when they pay a interest rate (4.30% APY) that’s much higher than most online savings accounts? Will they bring back the fees? I don’t know, but I don’t think it can be ruled out completely.

Small company can make quick changes, either way.

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3 Responses to “SmartyPig Eliminates $25 Check Fee”

  1. Jon Gaskell |  Apr 14, 2008 at 1:48 pm

    Appreciate the post. Wanted your readers to understand that when our system is fully automated – in the very near future – the issuing of the check will be eliminated, as indicated in our release. At that time, customers will receive their funds back via an ACH transaction. There will be no fees for either process, nor do we anticipate bringing back any of these fees in the future.

    Thanks, Jon Gaskell, Co-Founder SmartyPig