Couples that save together, stay together. And saving today is even easier than ever with the right tools. Find out how you and your significant other can use technology to power up your savings account in our Twine savings app review.
- Fast goal saving for couples
- Availability of both cash-only and investment options
- Conservative investment options
- Backed by a well-established financial organization
- The investment fee is high compared to other micro savings apps
- No retirement saving capability or goal
- No live financial advisors in the investment process
Twine is an app that empowers people to save more, save better and save together. In fact, they describe themselves as “an app for saving and investing. Built for two”. Insurance giant, John Hancock, offers the service. The app simplifies savings, allowing you to link accounts with your spouse or partner for the purpose of achieving shared financial goals. This can include saving money for the down payment on a house or a car, planning for a wedding, or taking a vacation.
Twine can be downloaded from the iOS App Store and enables you to save in cash, or invest in customized portfolios while moving toward your goals.
Headquartered in Boston, John Hancock Financial is a financial services company, specializing in insurance and retirement savings. Founded in 1862, it’s one of the most well-established insurance companies in America. As of December 31, 2017, Twine/John Hancock Personal Financial Services, LLC (JHPFS) had $927 million in assets under management in the program.
How Twine Works
You can use Twine from a mobile device or the web. The app functions as a goal-based advisory program aimed at enabling the user to achieve specific financial goals. Unlike robo-advisor type platforms, the user has substantial control over the investment process. For example, the user is responsible for determining whether to allocate investment assets to a specific goal, or to hold the position in an interest-bearing cash account. That’s important when saving for shorter term goals where there may not be time to recover short-term losses.
As a client, once you agree on a savings goal, you authorize the automated transfer of funds from your linked bank account into the Twine account.
Algorithms generate advice and account management instructions and will even recommend specific portfolio types. Twine will also automatically invest excess cash in your portfolio including dividends paid by your portfolio investments.
Twine offers three investment strategies based on your risk tolerance:
Most of the investment is in bonds and cash. Conservative portfolios will contain 94% money market funds and bond ETF’s, and 6% stock ETF’s. If you are within five years of reaching your goal, this is the recommend investment type. It’s also a preferred choice if household liquid net worth or annual income is less than $50,000, or if you are more cautious toward financial risk.
Moderate portfolios balance growth with capital preservation. The majority of the portfolio–90%–is in money market funds and bond ETF’s. The remaining 10% is stock ETF’s. If you are within five years of reaching your investment goal and willing to take on a bit more risk for higher returns, this is the recommended option.
Aggressive portfolios are higher risk/higher reward. Money markets and bond ETF’s make up 70% of the portfolio. The remaining 30% is ETF’s. However, if you have at least 15 years to reach your goal, the mix might be 80% stock ETF’s, and 20% in bond ETF’s and money market funds. This portfolio is generally recommended for those with longer term goal achievement, household liquid net worth or annual income of greater than $200,000, or a higher financial risk tolerance.
Twine Features and Benefits
Twine Investment Mix
Users invest in a mix of ETF’s from iShares, Vanguard, and some other fund companies. The one exception is the Emergency Fund goal, which must be held strictly in the cash account.
Account Clearing and Custodian
Apex Clearing Corporation serves as both a clearing agent and custodian for Twine accounts. Apex is one of the largest investment custodians and clearing agents in the industry, and a member of both FINRA and SIPC.
This account is administered by Apex, and is interest-bearing. ACH contributions to the account are subject to a five-day holding period before withdrawals can be made. The cash account may be swept into one or more participating banks, unless the investor elects otherwise.
Dividends earned on the investment portion of your account are deposited into your cash account.
The cash portion of your Twine account is fully protected by FDIC insurance for up to $250,000 per depositor. Your investments are protected by the Securities Investor Protection Corporation (SIPC) for up to $500,000 in cash and securities, including up to $250,000 in cash. However, be advised that SIPC coverage protects only against broker/custodian failure, and not losses in your portfolio due to declines in market value.
Minimum Initial Deposit
There is no minimum initial deposit to open an account, but you must have at least $100 in the plan in order to invest in ETF’s and/or mutual funds.
Withdrawals taken from your cash account typically take 2-3 business days to post to your bank account. Withdrawals taken from an investment account will generally take 7-10 business days, to allow for the sale of investments for the withdrawal.
Support is provided by both email and phone at 800-721-0111.
Signing Up for Twine
In order to sign up for Twine you must be over the age of 18, and be either a US citizen or a US resident alien.
Twine uses a four-step sign-up process:
- Goal Setup
- Create Account
- Link Bank
- Confirm Details
You may choose one of six goals: an emergency fund, general savings, children (not set up for college savings yet), vacation, a new home, or a large purchase. There’s also a custom goal category that allows you to set your own specific reason for saving and investing.
After you select the goal, you’ll choose either Twine for One, where you make deposits and withdrawals to and from an individual account, or Twine for Two, where two people make deposits and withdrawals to and from a joint account. The next screen asks How much do you want to save for your goal? You’ll then provide the target amount, your monthly contribution, and your partners monthly contribution. The app will tell you the estimated completion date on achieving your goal:
Once you’ve completed the Goal Setup process, you can move on to creating your account. You’ll provide your email address and generate a password. Once you do, Twine will email you a link that you can download enabling you to access the app from your computer and mobile device.
With this step you link the bank account(s) you will be using to fund your Twine account.
This the review phase, where you make sure all of your information is correct, and confirm your account. Once you set up your account, you will then do the same for your partners account.
Twine keeps pricing simple. You can invest for $0.25 per month ($3 per year) for every $500 you invest. That gives it an annual cost of $6 per thousand, or 0.60% of the amount of money you have invested.
However, you can save in cash for free. You can also deposit and withdraw money at any time, with no additional fees.
Other fees may include transfer taxes, fees charged by exchanges on a per transaction basis, fees required by law, or any fees charged by Apex.
Twine Pros and Cons
- The ability of a couple to jointly fund investment accounts for very specific goals.
- Creating specific goals often provides greater motivation to save money.
- Availability of both cash-only and investment options.
- Conservative investment options.
- The backing of a well-established financial organization in John Hancock.
- The investment fee of 0.60% is high compared to other micro savings apps, like Acorns that charges $1 per month, or 0.24% on a $5,000 account, or a robo-advisor like Betterment that charges 0.25% on all balances. (For basic plans with each platform.)
- No retirement saving capability or goal.
- No live financial advisors in the investment process.
Alternative: Acorns App
Should You Sign Up for Twine?
Twine sits in the territory somewhere between micro savings apps and robo-advisors. But rather than emphasizing micro savings–saving small amounts of many different transactions–you actually contribute specific amounts on a monthly basis enabling you to reach your goals faster. The investment option operates like a robo-advisor. Your only job is to contribute money to the plan.
The primary advantage is the ability of two partners to contribute to the plan at the same time. This not only allows faster accumulation of savings, but it also turns goals into shared experiences. This is an important aspect of saving money for any goal, particularly when it involves saving for a wedding, the down payment on a home, or expenses for children.
The major downside of Twine is that it doesn’t offer a retirement savings option. Instead, the focus is on shorter-term goals. This despite the fact that retirement plans are one of the primary lines of business of John Hancock. This can be a welcome addition to an investment universe where most brokers and platforms do focus on retirement.
Twine may stand head and shoulders above the competition in the often-overlooked realm of short-term savings goals. As well, the app may be the perfect motivator for couples to get on board with mutual savings goals. It’s a real opportunity to put savings plans into motion.
For more information and to sign up for the app, visit the Twine website.Topics: Money Management