Last year at Fincon, I was invited to meet with the folks who created Twine. This happens a lot at Fincon because companies are always looking to promote their new products and services and I tend to only go to the events where I think the company is interesting and if my other blogger friends were going.
For the last few years, there have been a lot of apps designed to help you save money by way of automatic transfers. Companies like Digit and Dobot, if you recall, were popular but the space was changing. Many of those companies started as free apps with no monthly fee but as time went on, each one started to charge a monthly fee for their services.
For people looking to save money in small increments, paying a dollar a month isn't appealing.
So when Twine reached out, I was prepared to see yet another micro-saving app and am glad I didn't jump to conclusions.
In a nutshell, Twine is a savings and investing app for couples that is free to use and save – you only pay if you opt to move your savings into investments. It's for couples because you can add a partner to a shared goal and both people can save or invest towards it.
Here's more on the app, the company, and what I think of their offering:
Who is Twine?
Twine is a savings and investing app created by John Hancock. John Hancock is a Boston-based financial services company most well known for providing life insurance but they provide a whole host of financial services these days. John Hancock, the company, was founded in 1862 and was named after John Hancock, the founding father. In 2003, the company was acquired by Manulife Financial, a Canadian multi-national financial services and insurance company based out of Toronto.
Twine is a savings and investing app designed for couples and partners, It's designed for two people to use it collectively and one of the few apps that put this at the forefront. It has many of the same features as other savings apps, including the ability to create savings goals, automate your savings, and invest in portfolios.
How Twine Works
With Twine, you start by creating an account and connecting a bank account to your Twine account. In your Twine app, you then set up savings goals that you're saving towards. You can set this amount to anything and change it at any time. Then, you set up automatic recurring savings transfers from your bank account to your Twine account – Twine will calculate how long it will take for you to reach your goal.
Once you set up an account, you can add a partner (you don't have to). This lets you both access your account and your partner can link up his or her bank account to make contributions.
Automatic deposits will occur about one business day after you create the goal and then happen every week on that day. So if you set it up on a Monday, it'll most likely transfer on Tuesday and then every Tuesday until you reach your goal. You can always check the goal to see the list of transactions.
All transactions are subject to a 5 business day holding period because it takes that long for the funds to clear. If you make a deposit, you can't immediately withdraw it because of this ACH holding period.
When you save into a cash account, you can start with just $5 and the saving is completely free. It also earns interest, which varies but is 1.05% as of this writing. Your cash account is FDIC insured up to $250,000.
If you want to invest your savings, you can move it to an investing account which is covered by SIPC insurance in the event of broker failure. Twine will ask you some questions about your financial situation, your financial goals, and your risk tolerance to build an asset allocation. Twine portfolios are a mix of stock and bond exchange-traded funds with a fee of 0.6% per year.
Three Investment Portfolios
Twine offers three portfolios:
- Conservative: “Designed to emphasize stability and protect against potential year-to-year capital losses on the way to achieving your financial goals. Conservative portfolios consist of funds with a higher share of securities with more stable historical returns, like bonds, and cash, rather than stocks.”
- Moderate: “Designed to guard against potential losses while still achieving meaningful growth. Moderate portfolios will likely show less volatile returns than most broad equity market investment funds and typically include assets like bonds and money market funds.”
- Aggressive: “Designed to offer more meaningful investment growth while still avoiding the large potential annual losses that users in broad equity market investment funds may sometimes experience. Aggressive portfolios annual returns may be somewhat more volatile than those in Twine’s conservative or moderate portfolios, but are still likely to be far less volatile than annual returns in most broad equity market investment funds.”
The portfolios are based on a variety of factors but timing is a big factor. If your goal is less than five years away, they will recommend you put your investments in a conservative portfolio. That strikes me as reasonable. If you have a longer time frame, or have more household wealth, they often suggest a more aggressive mix because you can handle the swings better.
How Much Does Twine Cost?
Twine is free if you only use the savings features. This makes it one of the best options compared to many other savings apps because they almost all charge a monthly fee.
If you opt to invest your savings in their mix of ETFs, the fee is 0.6% or about twenty-five cents a month for every $500 invested. Compared to a roboadvisor like Betterment, Twine is slightly more expensive. Betterment charges 0.25% for its Digital tier service, which includes rebalancing and tax loss harvesting.
For a limited time, if you sign up for Twine through a link on Wallet Hacks, they'll give you $5 towards your first goal after you begin funding it.
The terms are simple – just sign up (you have to be a new user), create a goal, and fund it with a transfer from your account. They will add an extra $5 between 14 and 21 days.
Twine has a few alternatives but not many offer all the features plus joint account access in the same way. Twine's saving features are common but they're free, which most other apps cannot afford to do. This is likely because they are backed by John Hancock and can afford to skip a monthly fee. You could check out these microsaving apps but I don't think you'll find an app that does so much more you'd want to pay a fee.
Alternatively, you could share a joint high yield savings account with your partner. You'd likely earn a higher rate of interest but not get the seamless integration with a roboadvisor-like investing service. You wouldn't get the clean interface of Twine or the automatic savings in such a neat package.
If the investing portion is what is most appealing about Twine, your alternatives are full roboadvisors like Betterment or Wealthfront. They offer investing options but come at a slightly lower cost. For beginning investors, both Betterment and Wealthfront charge 0.25% per year compared to Twine's 0.60% fee.
Overall, I think Twine has slotted itself nicely in between the savings apps and the roboadvisors.
You can help save towards your goal while earning a decent interest rate (better than brick and mortar banks, comparable to online checking accounts but below what online savings accounts offer) with the ability to invest if you really want to.