What Is Twine?Twine is a mobile app that gives you access to both a cash savings account and an investment account, depending on your preferences and financial goals, powered by John Hancock. With this app, you can set up specific savings and investment goals and turn on automated transfers to make them a reality. This app was built with joint goals in mind. While each user has their own account, you can team up with a spouse or other partner to save for goals together. That is a unique feature in the current automated savings app landscape, since most support only a single user. Twine offers a cash savings account that pays a fairly competitive variable interest rate. The current rate (1.05%) is about 100 times what you can get at the big traditional banks but only about half of what you get from top online savings accounts. The rates offered aren’t the highest rates around, but for this type of app with automated savings, it’s still appealing. The investment account uses low-cost exchange traded funds (ETFs) to help you grow your money at low costs. After setting up your account, you’ll see a recommended portfolio based on your personal goals and risk tolerance. There is a 0.6% annual management fee for the investment features. John Hancock is a major financial institution known for insurance and investments. It’s a big, trustworthy company and offers accounts insured by the FDIC and SIPC. John Hancock is a 155-year-old company and not going anywhere anytime soon.
How Does Twine Work?Twine is best for people starting with a small amount to save. Because the savings feature is free and there is no minimum charge for investing, there are few — if any — costs to getting started.
One of the best features is the ability to save for a goal with a partner. If you and your significant other are saving up for a home down payment, a wedding or a big trip, this app makes it very easy. You can add automatic savings rules that work for both you and your teammate.You can change, pause or cancel recurring savings at any time. Users can also make one-time transfers. You can set up one goal or multiple goals. It’s up to you to decide what you want to save and invest for. Once you set your recurring transfers, you don’t have to worry about it. The money transfers on the automatic schedule until you hit your big goals. Twine has an app for iPhones and other iOS devices. Sorry, Android users — even though you have the most popular operating system, the Android app is still in development. However, you can also use Twine on the web through a browser no matter what kind of phone you have.
Twine AccountsTwine accounts are broken down into savings and investments. Here’s how they each work: The savings account is an FDIC-insured account linked to your goals. The account earns a competitive interest rate, currently 1.05%. This is a variable rate that can change at any time with market interest rates. If you see a news story that rates have gone up (or down), you can expect that change to impact your Twine account interest rate as well. You need just $5 to get started with a Twine savings account. Many savings apps don’t offer any interest, and the biggest banks in the U.S. offer a measly 0.01%. Compared with a current average interest rate of around 0.10% nationwide, this account offers a very good savings rate. But it’s only about half of what you get from the likes of Ally and Capital One 360. Still, it’s very good overall. The investment account is available once your balance hits $100. This account puts your money into one of three portfolios made up of low-cost ETFs. Based on your age, current savings and willingness to take risk, your funds will go into either an aggressive, moderate or conservative portfolio. This account is SIPC insured against brokerage failure. You can save toward one or multiple goals with both types of accounts.
Twine FeesTwine is a low-cost app to use, but it isn’t free. Here’s how the costs break down: For the savings account, there are no regular costs or fees. The account is managed by a popular third-party processor called Apex that may charge fees for less-common activities such as wire transfers, paper statements and overdrafts. The investment feature costs 0.60% with no minimum. While the 0.60% is higher than fees charged by some other investment apps, the lack of a minimum makes Twine more competitive for users with low balances. For example, if you have an investment app that charges a minimum of $1 per month, you’ll pay that $1 even if your balance is only $100. The difference between that and Twine’s fee adds up. As your balance grows, the 0.60% is less competitive. But for those starting out or newer investors, the fee is very reasonable and far from a deal-breaker.
Pros and Cons
- No Fees for Savings — Twine interest-paying savings accounts charge no fees.
- Joint Savings — Save toward goals with a partner, even if you don’t have a joint bank account.
- Choice of Cash Savings or Investment Options — If you’re looking for a savings account, a set-it-and-forget-it investment account or both, Twine’s got you covered.
- Few Customer Service Options — There’s no live chat or phone number available for customer service.
- Lower Fees Elsewhere — While Twine’s 0.60% investment account fee is competitive, there are lower rates to be found elsewhere online.
- Higher Interest Rates at Online Banks — You’ll find higher savings interest rates at other online banks.