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Micro-savings platform Digit eases the burden of remembering to save money by automatically doing it for you. Considering 20 percent of Americans aren’t saving any money, according to a Bankrate survey, this tool can be helpful to foster savings habits. Only 47 percent are saving between 1 percent to 10 percent of their incomes.
Digit analyzes your spending habits and then automatically saves an “ideal” amount each day. The platform can help you reach your savings goals, whether it’s for a vacation, paying off credit cards and student loans, or simply putting money aside.
|Cost||First 30 days free|
|Pros||1% annualized savings after 3 months|
No account minimums
$5 referral bonus
|Cons||Can’t sync with credit card accounts|
Confusing savings algorithm
Limited customer service
|Bottom Line||Great for jumpstarting your savings|
Saving Money With the Digit App
After you sign up for an account, Digit will determine a safe amount to withdraw from your checking account, based on your lifestyle, income, and spending patterns. This is done without any input from the account holder but rather through an algorithm that determines the amount of money to transfer between the accounts.
Digit doesn’t provide details on is proprietary methods, but the review includes your checking account balance, upcoming income (either paychecks or predicted irregular income), upcoming bills, and recent spending.
If extra money is available in the account after the review, that money will be transferred to the user’s Digit account. Once money is available in the account, users will then describe their goals. An emoji, which Digit calls a “goalmoji,” will be added for reference to a stated amount to save and a goal date.
With that information, Digit will begin putting aside money to achieve the goal. Along with accumulating savings, users can also transfer the funds to their checking accounts any time they want. For the first 30 days Digit is free, then it costs to $2.99 per month.
Digit: Automate Your Savings
- Automated savings and 1% savings bonus
- Unlimited withdrawals
- Low balance protection
- Overdraft reimbursement
Digit does offer some bonuses and incentives. After saving with Digit for three consecutive months, an account receives a 1 percent annualized savings bonus that is automatically deposited into the Digit account. There is also a $5 referral bonus for each friend your referred to Digit.
Digit allow users to use text messaging with the app. This enables them to perform their regular banking transactions, such as viewing balances, taking a withdrawal, saving additional money, or viewing impending bills — all without a computer.
Those with Chase or Wells Fargo accounts can receive transfers to and from Digit on the same business day.
In addition, Digit accounts don’t have minimum amount requirements, but for those carrying a low balance, there is protection that will automatically transfer money from a Digit savings account to a user’s account. And if a checking account incurs an overdraft through Digit’s auto-saving feature, Digit will reimburse fees for up to two occurrences.
Digit is a useful savings tool for its automated methods and easy-to-use features, but it does have some shortfalls. This technology doesn’t link with credit cards, although monthly payments will show in a user’s checking account and will factor in to the monthly savings amount.
Secondly, while Digit’s text messaging is robust, users cannot use the website to make withdrawals or deposits.
As for the savings algorithm, users will not know the details behind the reasoning for how the amount of money is determined as its transferred into a user’s account every couple of days. This vagueness could cause some users confusion.
Finally, Digit’s customer service is limited to its Help page, which is structured more like an FAQ section. It does not provide a phone number, a live chat feature, or an address for the company. Using email is probably the best way to directly contact customer service.
Digit is a great financial tool for consumers who need to jumpstart their saving habits. Setting goals can not only make the user aware of where they want to spend their money and start saving, but provide a sense of satisfaction once a goal is accomplished.
Like other micro-saving apps, Digit isn’t ideal for a long-term savings plan. You should not rely on it to establish your retirement plan. But the $2.99 monthly fee could be worth it for many users by helping them save more than that toward purchase or savings goals.
So, turn to the Digit savings app if you’re looking for:
- A financial app with automated savings features
- Help jumpstarting your savings habits
- A low-cost way to generate savings that aligns with your lifestyle
Author: Debbie Baratz