Digit Review – An App That Automatically Saves for You
Looking for a personal finance app that helps you save money? Digit is a great contender in a market that’s full of fierce competition. While Digit does charge a monthly subscription fee, its unique tools and automated approach to savings represent a winning combination for some consumers.
- What is Digit?
- How does Digit work?
- How much does Digit cost?
- The bottom line
What is Digit?
Digit is an app that helps you with saving, investing, budgeting, and paying off debt. Whether you’re saving up for a significant expense like a down payment on a house or paying off your student loans, or you’re just looking to pad out your emergency fund and stop living paycheck to paycheck, Digit has you covered.
The app works by automatically depositing cash into your Digit account in small increments. Digit analyzes your income and spending habits and deducts small amounts whenever it judges you can afford it. These micro savings add up over time and can make a big difference when it comes to achieving your savings goals.
There's no limit to the number of goals you can set with Digit, so you can customize multiple savings buckets for everything from a rainy day fund to paying off credit card debt. Any cash held in your Digit account is FDIC insured up to $250,000.
How does Digit work?
It’s quick and easy to set up a subscription to Digit. On their website, the signup button is front and center.
To sign up for a free trial, you’ll have to provide some information about yourself, including your name and mobile phone number.
Once you create an account, you’ll be prompted to securely link your bank account using Plaid. This process is securely encrypted and takes just a few minutes.
After you link your bank account, you’re all set! You can then use Digit to customize savings goals, track your progress, and more.
How much does Digit cost?
Digit is free for the first 30 days. After that, the service charges a flat fee of $5 per month. This small fee is well worth it for people who enjoy the automated savings tools that Digit provides, but it may make Digit a less than ideal solution for consumers on an extremely strict budget or those looking to avoid unnecessary fees.
Digit has plenty of features to help you save, including automated savings, overdraft protection, unlimited withdrawals, and more.
Digit’s core feature is the ability to automatically save small amounts of money at a time. Digit’s algorithm analyzes your spending and saving patterns, then deducts money when it judges you can afford to do so. This process makes it easy to set your savings goals on autopilot. It also means that Digit learns your monthly budget, upcoming bills, and other expenses in order to determine how to help you sustainably save money.
Digit’s automated savings are also partially based on the savings goals you set. You can set goals for any type of savings or future expense, and customize the amount you’d like to save and a timeline for when you want to reach your savings goals. Digit takes these numbers into account when deducting money from your account so that you can meet your financial goals on time without having to think about it.
Digit only deducts money that you can safely set aside. But if your linked checking balance is low, Digit can also help you avoid an overdraft by transferring money back to your checking account. This can help you avoid overdraft fees and keep your savings on track.
Pay down credit card debt
Trying to pay off credit card debt that comes with a high-interest rate? Digit can help. The Digit app’s Credit Card Debt Reduction program lets you make automatic payments to any major credit card company with money held in Digit. You can use this feature to sustainably pay down credit card debt a little bit at a time. The tool works with most major credit card companies.
Invest in long-term goals
In addition to traditional savings, Digit also features investment and retirement accounts suitable for saving for long-term goals. Digit investment accounts invest your funds in a portfolio of ETFs customized based on your risk tolerance. Digit also offers traditional and Roth IRAs for customers interested in saving for retirement. These investments are customized based on your current age and retirement date.
Because both investment and retirement funds are invested in the stock market, there’s no guarantee, and there’s always some element of risk involved. That said, investment and retirement accounts are a great way to grow your wealth over time.
Need to access the money you have already saved? Digit features unlimited withdrawals, so you always have access to your cash and can move money to your checking account at any time, whether you need it to fund a purchase you’ve been saving up for or an emergency expense.
Digit’s savings account is FDIC insured up to $250,000, which is standard for most savings accounts. This means that your savings are protected. Digit also features state-of-the-art security measures and securely encrypts your personal information and data.
No account minimums
Digit features no account minimum balance, which means that it can help you with your savings goals even if you’re only able to save a small amount of money at a time.
Digit carefully analyzes your spending and saving patterns before withdrawing money, which makes it unlikely that they would ever overdraft your account. If they do so by accident and you’re charged an overdraft fee, however, Digit will reimburse that fee through their no-overdraft guarantee.
Website and mobile app
Digit’s website and mobile app are both well-designed and easy to use, which will appeal to Millennials and younger consumers who are more comfortable banking online. They make it easy to visualize your savings and keep track of your goals. If you ever need to make any changes to your account, check your account balance, or cancel your subscription, it’s easy to do so through the app, which is available for iPhone and Android phones.
When you save money using Digit for three months in a row, you can earn a .10% annualized savings bonus. This is a nice reward for using Digit that can help you to grow your savings over time.
If you refer a friend to sign up for Digit, you can also receive referral bonuses. You’ll earn $5 for every friend who signs up using your link.
Who is Digit best for?
Digit’s automated savings makes it a great choice for anyone looking to save more money.
People interested in automated savings
Digit is designed to facilitate automatic savings, so that you don’t even have to think about it. Digit’s algorithm understands when you can afford to save money, and saves in small increments at a time. If you’re interested in saving more money but find yourself getting bogged down by the details, Digit can help you to put your savings on auto-pilot.
People who have trouble saving money
If you always want to save money but still find yourself draining your checking account or living paycheck to paycheck, Digit can help by saving small amounts of money automatically over time. These small amounts will add up gradually, enabling you to attain your savings goals even if you’re on a limited budget.
Who shouldn’t use Digit?
While Digit is a handy savings tool, it may not be the best fit for everyone.
People who want a free savings tool
Digit does charge a fee of $5 per month. If you’re looking for a truly fee-free savings tool, then Digit may not be the best fit for you.
People who want complete control
Because Digit automates the savings process, it may not be the best option if you’re looking for complete control over the savings process or prefer to do everything yourself.
Pros & cons
Pros of Digit
- Automated savings - Digit makes it easy to put your savings on autopilot.
- Save for multiple goals - If you’re trying to save for multiple different goals, Digit allows you to create and manage different savings funds.
- Access your money anytime - With unlimited withdrawals, you can transfer money to your linked checking account at any time.
Cons of Digit
Monthly fee. Although a free trial gives you a chance to sample Digit for a month, you'll pay $5 per month to use Digit to save.
Digit vs. competitors
|Digit||$5/month||Yes||Overdraft protection, different savings goals|
|Acorns||$1-5/month||Yes||Investing and retirement savings|
|Qapital||$3-12/month||Yes||Joint banking, automatic transfers on payday|
Acorns also allows customers to save money automatically by rounding up loose change. Unlike Digit, however, Acorn’s main focus is on investing and long-term savings. Acorns lets customers invest funds in the stock market to grow their wealth. Acorns pricing starts at just $1 per month, and customers can unlock additional features and benefits at the $3 per month and $5 per month levels.
Like Digit, Qapital focuses on enabling customers to sustainably save money over time. Plans range from $3 to $12 per month. Instead of featuring automatic small transfers, Qapital allows you to divide up your paycheck on payday between your spending account and saving and investing goals.
One of the features that sets Qapital apart from other, similar tools is that it enables joint savings between multiple people. Whether you’re saving up for a purchase with your significant other or another family member, Qapital makes it easy to collaborate on joint savings goals while still maintaining your own separate bank accounts.
How much does Digit cost?
Digit charges a flat fee of $5 per month.
Do you need a savings account to use Digit?
You don’t need a savings account to use Digit, just a checking account.
What can you save for using Digit?
You can use Digit to save for any goal you want, including paying off debt, building up an emergency fund, the down payment for a house, a vacation, or anything else you want.
The bottom line
If you’re trying to save money and aren’t sure where to start, Digit is a great tool to help you automate the savings process. Using Digit, you can gradually and sustainably save towards big goals. Best of all, if you find yourself in a tight financial spot or have to cover some emergency expenses, Digit’s sophisticated algorithm knows to pause deductions from your checking account.
If you want complete control over the savings process or if you’re looking for a fee-free savings tool, then Digit might not be the best fit. But for customers struggling to save looking for a tool to help them along the way, Digit is a great choice.