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Saving money is a severe struggle for many. Living paycheck-to-paycheck is common and makes it almost impossible to set aside money. Or, you might have the extra money to save but you have no idea what to put your money toward your how much you need to save.
Enter Digit, an app that’s supposed to help you save money without having to think about it much. It sounds like a dream to me, someone who loves having a cushion but also finds it challenging to remember to set aside money every month.
I downloaded Digit a few weeks ago and have spent some time with it to understand how it all works and give you all the details, so you can decide if it’s an app you want to use.
Want to check it out for yourself? Here’s the link:
What is Digit?
You might have heard of savings apps like Acorns and Stash. Their focus is to make it as painless as possible for you to save money toward a goal or for your future. Acorns rounds up your purchases to the next dollar and invests the spare change, while Stash lets you set up an automatic savings plan where money will go into your Stash account and will be invested by professionals.
Digit is similar, but it’s even more automated than its competitors. The app is designed to get a full picture of your financial profile by tracking your income against your spending.
Then, it’ll come up with a savings plan that makes sense for you and will automatically withdraw that cash and save it. You get 1% annual interest on your savings, which is more than the current average of 0.08% APY.
The idea is that Digit will make transfers that won’t put a damper on your wallet and, therefore, you shouldn’t notice them much. The amount Digit takes out is unique to you and your financial picture, and it will only take out what you can afford to save, making it as painless as possible.
Who is Digit Best For?
Digit is definitely best for people who feel overwhelmed with saving money, whether they don’t know where to start or they have no idea how much they need to save. With so many incredibly helpful apps on the market, why not have one that takes the confusion and stress out of saving money?
Unlike Acorns, Stash, and other savings apps, Digit is wholly personalized for each user. As it tracks your expenses and income by linking your bank accounts, it’ll start to learn more about what you can afford. It tends to start small with savings and then adjust its algorithm as it begins to understand more about your finances over time.
If you’re looking for a 100% automated way of saving money, Digit is it. The good news is that you can always adjust your savings rate if you find that it’s taking out too much or too little, which is great for savers who still want a little control.
How Does Digit Work?
Digit tracks your income and expenses when you link your bank accounts. It doesn’t track credit card spending directly because that money doesn’t affect your actual money flow. However, when you pay your credit card bill from your bank account, Digit will see that and take it into consideration to learn how much you pay out each month, on average.
The app will transfer money every few days based on what you’re currently making, spending, and what you have available to save. You can adjust your savings goals and withdrawals as needed, but the longer you use the app, the more it learns about you. Digit tracks how often you get paid, how much you make, and your regular spending patterns for those who don’t have regular paychecks.
I usually see about $10 getting saved every two or three days. Depending on how many bills I have for the week and when I go grocery shopping, that might drop down to $5. I’ve also had a few closer to, or over, $20. Digit claims that their average savings transfer is $18, but usually falls anywhere from $5 to $30.
You can see everything you’ve saved so far in your account within the app. Digit lets you text using the app to let it know how much more you want to keep or what you want to save toward. You can even use emojis, called “Goalmojis,” to do this via a digital chatbot!
How Does Digit Make Money?
Digit charges $2.99 for its service because it’s basically a done-for-you savings program. You can, however, sign up for a 30-day free trial just to make sure it’s for you before you start paying.
The app’s been around for about four years now, but it didn’t start charging a $2.99 monthly fee until 2017. Existing users had a 100-day grace period before getting charged. The monthly charge was something that, according to Digit, needed to be done to continue to bring in revenue beyond its initial investors, like Ribbit Capital and Google Ventures.
On a positive note, the subscription fee has also allowed the company to pay more in interest for your savings annually, from 0.2% to 1%.
How Does Digit Protect My Money?
Digit has a few of ways that it protects you and your money.
First, it keeps everything encrypted. The app uses 256-bit encryption to protect your bank account information you link to it, plus any usernames, passwords, and anything else with your personal information. Those using a device with iOS can also create an extra layer of protection with face recognition or their touch ID.
Next, Digit offers a 100-day money back guarantee if you find that the subscription you’re paying for just isn’t what you expected. Don’t love the app? You’ll have 100 days to decide whether you want to ask for your $2.99 monthly fee back. All you need to do is contact the Digit team for a request.
Finally, Digit keeps the cash you save at FDIC-insured banks and protects your savings up to $250,000. Digit holds money at Opus Bank, Wells Fargo, and BofI Federal Bank.
Pros and Cons of Digit
Since Digit has a similar concept as other savings apps, you might be comparing it with others to figure out the right one for you. Here are some notable pros and cons that may help you decide:
Pros of Digit:
- Free 30-day trial to test Digit
- 100-day money back guarantee if you don’t love the app
- FDIC-insured savings
- Done-for-you savings make it as painless as possible to save
- Best for short-term, small savings goals
- Referral system pays $5 per referral
- 1% savings accrual
- Chase and Wells Fargo customers get same-day transactions
- No-overdraft guarantee
Cons of Digit:
- There’s a monthly fee of $2.99 to use the app
- The algorithm is somewhat secretive; members don’t know exactly how it’ll work until they try it
- Although the savings rate is decent, you’d need to have thousands saved before it starts covering your monthly fee
- Not great for long-term savings
- You can only use the app, not the website, to make any transactions
How to Use Digit to Automate Your Savings
Digit’s primary goal for every customer is to put their savings on autopilot. If you’re new to this concept, though, you might find the whole thing a little confusing and scary. Since using the app, I’ve learned the basics of how it all works, so these tips may help you:
The whole savings thing is probably the most confusing part of Digit, even though it’s actually effortless because Digit does your savings for you. What’s confusing is understanding exactly how Digit learns about your finances enough to make smart savings decisions on your behalf.
If you’re willing to let Digit take over, then saving money is a breeze. Every few days, the app will automatically transfer money from your linked bank account to your Digit savings account. If you feel like it’s not quite getting your finances correct, you can always go in and adjust it to gain more control over the savings algorithm, which I’ll get into detail with in a moment.
Everyone gets a 1% savings rate from Digit, paid quarterly (every three months).
One way to make sure you’re saving toward fundamental goals is by setting up goals in your Digit account. These can be anything from a vacation fund to a paying-off-debt fund. Or, create a goal to save for that new jacket you’ve been eyeballing.
The Goals feature has several preset goals you can choose from when you’re ready to add a new one, but you can also select “Create a unique goal” to make your own. Enter an emoji that makes sense for that goal because you can use it later when you text Digit to add more money toward a savings goal.
Your goals aren’t set in stone. If you decide you need less money in one area and more in another, you can transfer cash between goals or back into your bank account.
Changing Your Savings Rate
If you feel like you need to adjust the amount that Digit’s taking from your account, either higher or lower, you can do that through the app.
The first way to do this is by setting a maximum withdrawal amount for each day. If you have several goals, you can click on the goal to adjust the savings limit for that target. If you set it at $5, Digit won’t remove any more than $5 from your account for that goal any time it makes a withdrawal.
If you only have one savings goal, just set the maximum amount you want to save each day Digit makes a withdrawal. This ensures that Digit will never take out more than you want to save.
You might want to save more than what Digit’s doing for you. In that case, you can use the Boost feature. Say that Digit usually withdraws about $10 on savings days. If you have two goals, Digit will split the money between them, giving them $5 each. You can Boost one goal to get more of the savings share than the other, like a $7/$3 split instead of $5/$5.
When you want to withdraw what you’ve saved, Digit makes the process simple. Any time of the day, and any day, you want to get your cash, you can. There’s no minimum balance and no fee to take back your savings.
To withdraw from a goal, click on that goal and click “Withdraw.” Enter how much you want to take out and click the button at the bottom. Digit will tell you the estimated date your money will arrive, which is usually between 1 to 2 business days.
Your money goes right back into your connected bank account.
The Digit Pay feature is one of the more recent features Digit’s implemented to make it easier for people to pay off debt. With Digit Pay, you can make automatic payments from the savings you accrue with the app to pay off your credit card balances.
To use it, you can set up a goal for credit cards. Digit will automatically save money to pay off your credit cards, just like it would for any other goal. The app then uses that cash to make an extra payment toward your credit cards linked to your account in addition to what you’ve already paid for that month, helping you crush that debt faster.
Communicating with Digit
Communicating with Digit about your savings and adjusting your cash flow is easy when you use the free texting service through the app. It’s basically an automated chatbot with several known commands you can use to learn more about your savings or stay in control of your money.
If you want to withdraw cash from a goal, for example, you can text “Withdraw Goal” and Digit will walk you through the steps to do so.
You can also use the Goalmoji feature to tell Digit what goal you want to save for or withdraw from using only emojis.
Making Money with Referrals
Digit offers a way that members can also make money in addition to their savings – through referrals! If you have friends or family that you know might need a service like Digit, then let them know about it using your unique referral link.
You’ll get $5 for each friend who signs up under you and starts their monthly subscription to save with Digit.
Common Complaints About Digit
Digit is extremely helpful for people who need a little extra help saving money, but it’s not perfect. Here are a few of the most common complaints I’ve seen about the app:
A 1% interest rate isn’t really anything to write home about, so it’s one of the top complaints about Digit. However, when you consider that it’s right in line with what most banks give for their savings accounts, it’s not bad.
The thing is that Digit wasn’t meant to be a long-term savings solution. While you might choose a high-interest savings account for your retirement plan, you’d use Digit for more short-term goals, like saving for a down payment on a car or purchasing your family’s Christmas presents.
Digit’s focus is to help you automate savings, not have a ton of interest add up on your huge chunk of savings. In that respect, it does its job.
Digit is currently only available to people living in the United States, which is a bummer for those in other countries. Unfortunately, this is an issue with several savings apps because they’ll only link to banks within the United States for legal reasons.
Customer Service is Tough to Get in Touch With
When you visit the Digit website, you’ll notice that there aren’t really any options for getting in touch with customer service if you have an issue. There’s a decent help section, but that won’t do when you need to speak with a real person. The chatbot is just that – an automated bot with no humans in sight.
It’s tricky to find, but there is another help section with a way for you to send in a ticket to customer service. I haven’t tried to contact the team myself, but I’ve read a few complaints about it taking a while to get a response.
Is Digit Legit?
Yes, Digit is a legit way to start saving money without putting much thought into it! There are plenty of online reviews showing how real people have saved money using Digit, and I’m doing it too. I haven’t found anything concerning yet, and I feel like Digit has my (and my finances) best interests at heart.
How to Sign Up for Digit
If you think Digit is the savings app for you and you’re ready to test it out, you can download it from these links:
Once you do that, the app will walk you through linking your bank account, setting up goals, and completing everything you need to get started saving.
Regardless of your savings goals, Digit can help you get there for a low cost of $2.99 a month. It’s not much when you think about how much stress the app can take off your shoulders by automating what you can afford to save.
Not sure if Digit is your best option? There are plenty of other savings apps that might help you, many of which we’ve reviewed here on Frugal For Less:
Do you currently use an app to help you save? Let us know what it is in the comments!