Digit is a budgeting and savings assistant that analyzes your spending habits and helps you save a little bit every day. The app uses algorithms to adapt its savings strategy to your spending habits, so you wonâ€™t even miss the money thatâ€™s being set aside.
When compared with other saving apps, Digit offers unique functionality as it helps you save money without altering your spending habits. However, Digit does not pay interest on your deposits, and its rewards payments do not justify the $5 monthly fee for the app.
At its core, Digit aims to make saving money automatic and well adapted to your spending habits. Instead of feeling like saving is a sacrifice, Digit helps make it something that happens in tandem with your regular spending patterns.
After signing up for Digit, youâ€™ll be asked to connect your checking account to the app. Digit uses algorithms to analyze your spending habits and discover when you can afford to save money. Over time, it will automatically move small amounts of money from your checking account to your Digit savings account.
The four main factors that Digitâ€™s algorithm analyzes when determining how much you can afford to save are your checking account balance, your income â€” whether itâ€™s a regular paycheck or a more irregular source of income â€” your recurring bills and your regular spending habits.
Digit has a no-overdraft guarantee, and says it will only set aside what you can afford to save. If it does happen to overdraw your account, Digit will reimburse the fees for up to two overdrafts.
You can sign up and use Digit on its website, or download its iOS or Android app. Itâ€™s currently compatible with over 2,500 U.S. bank and credit unions.
Within the app, Digit allows you to set and customize specific savings goals, such as â€śrainy day fundsâ€ť or â€śhoneymoon fund.â€ť While Digit does not pay an APY on savings deposits, they do offer cash rewards for users who save consistently.
The reward comprises a 1% annualized cash bonus. If you save for three consecutive months, Digit deposits in your account 0.25% of your average daily balance from the past three months.
To earn your savings bonus, set up one or several savings goals, including the amount youâ€™d like to save and the date youâ€™d like to have it saved by. Digit withdraws funds from your checking account and deposits the funds in each of your savings goals.
There is no limit as to how many goals youâ€™re able to save for. You cannot combine savings goals, but you can close one goal fund and move the cash into another goal fund.
The amount withdrawn from your checking and moved to Digit savings is typically split up evenly among your different goal funds. However, Digit has a â€śboostâ€ť feature, which allows you to prioritize saving for one goal over the others. Digit will automatically put more money toward the goal you boost, and less money toward the others. You can boost as many goals as youâ€™d like at once.
Funds saved with the Digit app are held in accounts at partner banks, which have Federal Deposit Insurance Corp. (FDIC) insurance for up to the legal limit. Digit allows you to make an unlimited number of monthly withdrawals from your savings goals.
Typically, withdrawals take about one business day to post to your checking account, although the app does feature an instant withdrawal option for $0.99, in which youâ€™ll receive your funds within minutes.
Digit is free for the first 30 days, and then charges a fee of $5 per month. While the intuitive savings tool is the main feature of Digit, the app offers several other features.
This tool allows you to seamlessly save for credit card bills, and to make automatic payments to any major credit card company with your funds held in Digit. Just set up a â€ścredit card debtâ€ť goal within the app.
In the same vein as its credit card reduction tool, Digit offers a student loan debt payment feature. Simply set up a student loan debt goal, and connect your loan servicer and loan account. Digit will then save funds toward that goal as it usually does, and will send the amount you save as a loan payment on whatever date you set. This is meant to be a supplementary payment toward your student loan debt, and should not replace your regularly-scheduled payments.
Digit allows you to link a secondary account, so you and your partner can simultaneously save toward the same goals and have your funds deposited into that joint Digit account.
Digit isnâ€™t the only savings app out there. We stacked it up against Tip Yourself, Qapital and Joy. Hereâ€™s how it compares.
If you are truly looking to grow your savings significantly and earn the most bang for your buck, look elsewhere. Digit makes saving money a secondary priority, and puts spending first, making it hard to aggressively save toward specific goals. Instead, put yourself on a budget, learn strategies of self-control or have a percentage of your paycheck directly deposited into your savings account at your bank. That way, youâ€™re saving money first, and then can spend whatâ€™s left over.
However, if youâ€™re looking to casually build your savings without much effort and just want to simply start saving something rather than nothing, Digit is a useful tool that is definitely worth the download.
This Cash Back Number May Surprise You
Best Travel Credit Cards With No Annual Fee
Getting Approved For 1 Of These Credit Cards Means You Have Excellent Credit
Credit Cards Charging 0% Interest until 2021