The Cash Wedding Registry – an Idea That Could Render Gift Registries Obsolete
Sometimes, you just don’t want any of the silly gifts that usually go on wedding registries. Instead, you want to be able to put money together to buy a new car that you really need after you get married. Or you want to put a down payment together to buy a new house. Not infrequently, you may find that you really want something that’s extravagant but you’re afraid of what people might think if you were to put a luxury safari in South Africa or a $3000 designer gown down on your registry. Wouldn’t it be nice if you could just ask for cash instead of an actual gift? Exactly. And that’s the very idea behind the cash wedding registry.
Banks and Financial Institutions Providing Cash Wedding Registries
Financial wedding registries aren’t really a new idea. Some of these registries have been around for years. They’ve served people who have looked for cash contributions to help put a large purchase together. But these have decidedly been on the fringe of the wedding registry business. This is changing now. The trend these days shows a mainstreaming of the cash wedding registry. The trend is so clear now that mainstream banks and financial institutions are beginning to jump on board.
Betterment
Take Betterment, the personal investment advice site, for instance. They have a new cash wedding registry idea that’s seeing quite a bit of popularity these days. When you open a registry on this website and tell your friends and family about it, they get to make gifts of cash.
The difference comes in though, in the way Betterment handles those contributions. They don’t just let your money sit idle. Being the personal investment service that it is, Betterment invests your money in a portfolio of safe ETF’s and treasury bonds. This way, you get to make a little extra money.
SmartyPig
SmartyPig, the online bank with the funny name, feels that the cash wedding registry idea is right up its street. The bank allows you to create a registry and it’ll give you a 1% yield on whatever contributions your registry takes. They are so taken with the success of this idea in their business that they are actually spinning it off. They are licensing their cash registry technology to other banks.
It’s pretty easy to see why banks would be so interested in the registry business once you see how much money it pulls in. According to the bridal website The Knot, the average wedding gift from a family member is worth close to $150 and the average wedding gift from a friend is worth about half that amount (perhaps this settles any debate there might be about who loves us more).
Around the country, stores that operate wedding registries pull in about $1 billion in sales each year. If the banks could divert even half of this amount to their cash wedding registry business, they would be in for a huge increase in fees and profits.
The banks also do a bit of creative thinking here. The hope is that at least some of the people who set up a cash wedding registry with them could be interested in investing in a home. If they could lock up their business, they could line them up for a mortgage very soon.
Wedding Gift Registry – Outdated?
It isn’t just the banks that find the cash wedding registry idea attractive. Consumers tend to find it a very convenient and appealing concept, too. The thing is that the very wedding registry idea is a rather outdated one today. The idea first came into being at a time when people married rather early when they didn’t have anything at all. They needed gifts for their friends and family just to be able to set up a life together.
These days, people generally marry late into their 20s or 30s. They get married at a time when they are well enough established that they can afford to set up home on their own. What they do need is help paying for an actual house – or buying big-ticket items such as perhaps a second car or home decor. It can be rather hard for people to predict what exactly they will need their money for. People just appreciate having cash that they can spend on getting their life together in ways that they can’t really explain to their friends or foresee properly.
Gift givers may find this idea convenient too. They don’t have to pore over some boring gift registry and find some kind of item that’s in their price range and worth giving. They just have to contribute cash – whatever they are able.
Exercising caution
Still, experts in cash wedding registries say that people shouldn’t just jump in headfirst. There are a few cash registries that will try to tempt you with high return investments that are risky. Since people usually tend to spend their wedding gift cash on something within five years of having become hitched, investing in risky investments could fail to pay off. It’s usually the most sensible choice available to simply invest in a money market account.
Keeping your costs down
Banks make a profit on these registries by charging fees – both of the gift giver and the gift receiver. SmartyPig for instance, charges a 2.9% transaction fee when a gift giver contributes to a registry. And then, there are annual account fees that run to about 0.35% of whatever you have in the account. If you invest with a registry that promises to invest your money in treasury bonds or other such investments, those moves come with their own fees and charges.
But these services argue that these are very affordable rates to pay – especially when you compare them to what certain other registries collect. Registries that collect money for wedding costs can charge as much as 10%. Also, they point out, consumers really are used to paying very expensive shipping fees when they choose traditional gift wedding registries. The fees that cash registries charge have to be significantly cheaper than the kind of shipping fees that online stores charge – that’s the logic they go for.
The One Argument – Sentiments
There’s just one hurdle left that the businesses running cash wedding registries need to take care of – the sentimental one. Gift givers often like the idea of giving something that’s real and tangible. They want the marrying couple to be able to look at a toaster or a food processor and think about the person that it came from. A cash gift is just completely faceless in comparison. For the marrying couple that registers for a cash gift, it can be rather embarrassing to direct guests in this way. You can’t simply put this on the invitation, of course.
Usually, you just need to quietly spread word along the grapevine. Or if it would make you feel better, you could try a registry like Deposit a Gift, who takes contributions on your behalf and hands you over the cash. It is specifically meant to register for gifts that are not listed in stores.