Twine is a saving and investing app for couples who want to work towards joint financial goals, together. Is it legit and worth using though?
What is Twine?
Twine is a saving and investment app backed by the financial services company, John Hancock. While this app was designed around helping couples work toward their financial goals, it is just as useful for individual use. Simply put, Twine was designed to help you save and invest toward your financial goals.
How to use Twine:
- Download the free app on your IOS device, or go to the website https://app.twine.com/get-started-mini/home .
- Create a profile and connect your bank to your account.
- Choose the type of goal you want to save toward or create a custom one.
- Set up automated contribution amounts with recurring payments. These can be skipped or paused at any time.
- Choose an investment portfolio, if desired (not a requirement).
Types of accounts:
Cash Savings
To get started, you need a minimum of $5. There are no fees associated with a cash savings account and you can withdraw, deposit, pause or skip payments at any time at no charge. You will earn a 1.05% variable interest rate, which is better than a traditional checking or savings account with a bank.
You can either save toward your goal(s) as an individual, or as a couple. If you choose to save as a couple, you will invite a partner to join your goal. Examples of things people save toward are down payments, weddings, and vacations.
Investment Portfolio
Once you have a cash savings account set up, you will be asked if you would like to set up a Twine investment portfolio, which requires a minimum of $100. If you have ever opened an investing account, it’s a similar process. Twine will recommend a portfolio based on your goals, financial situation, and the level of risk you are willing to take. These investment portfolios are built off low cost, broad-based indexed Exchange Traded Funds (ETFs, for short).
Twine offers three investment strategies based on your risk tolerance and will manage your portfolio based on a glidepath, which systematically reduces your exposure to riskier assets as your near your goal:
- 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.
Unlike the savings account, there is a fee to invest with a Twine portfolio. You are charged $.25 per month for every $500 invested. This works out to 0.6% annually.
Managing money:
When you first create your account, you will be prompted to set up automated deposits from your bank to your Twine account. You can increase or decrease this amount at any time. Twine also has a feature that gives you the option to pause or skip a deposit, which can be done at any time.
If you need to make a withdrawal from your savings account, you will need to wait 2-3 business days to see your money go into your bank. The time to withdrawal money from your investment portfolio is 7-10 days; the reason being Twine needs to sell your investments.
For investment accounts, Twine will automatically invest excess cash in your portfolio including dividends paid by your portfolio investments. This feature helps to rebalance your account to ensure your portfolio stays on track.
Withdrawals from your savings or investment account can happen at any time- it is your money in the end.
Is Twine safe?
The Securities Investor Protection Corporation (SIPC) protects your account and insures up to $250,000 in cash or up to $500,000 in investments in the event of broker failure. The Federal Deposit Insurance Corporation (FDIC) protects your cash up to $250,000. This protection coupled with the fact that this app is backed by John Hancock makes it a reliable and safe place to park your money.
Benefits of Twine
The platform is inviting, cheerful and user-friendly. Your accounts are secured and backed by the FDIC and SIPC. Whether you have a portfolio and a savings account or are just working toward a goal while saving in cash, you are given regular recommendations, tips, and progress updates. You are given the option to join with a partner in working toward a common goal, while retaining separate accounts. Interest rates are higher than checking or savings accounts at traditional banks, which means you can potentially earn more money. You are also given the option to invest, which can grow your money, for a small fee. The Twine investment portfolio allows you to track your progress and manage your investments from anywhere.
Drawbacks
Twine is currently only available through iOS or their website. There are also other platforms, such as WeBull, that are cheaper to invest with.
Apps like Twine
Final Thought
Twine is great for those looking to save for their future and grow their money. It is especially useful for individuals looking to enter the investment market but are unsure of how or where to start.
