Who doesn’t want to have extra cash at the end of the day? More money in the bank = a happier and less financially-stressed you. But it’s easy to get sidetracked from your savings goals when you realize how hard saving money can actually be. So we’re always on the hunt for savings shortcuts.
Digit, the micro-saving app that’s been around since 2014, is one of the most popular money-saving apps today because of how discreet its technology is. The app analyzes your income, bills, and spending habits to determine what’s a safe amount for it to transfer into a savings account every day (without you having to lift a finger).
The actual amount of money being moved switches on the daily, as it depends on your balance and upcoming bills. Some days, you could see mere cents being shifted while other days might see a few dollars slip out of your checking. Consider it like putting your spare change into that piggy bank you had as a kid, except now it’s all digital.
Last year, Digit stopped being a free download available on iOS and Android phones. It’s now a pay-as-you go app with a $2.99 monthly fee. The irony of paying money to save money, even if it does come out to about $36 a year, hasn’t gone unnoticed. But, depending on your savings goals, Digit’s pros might just offset its cost.
Pros
You don’t have to think about it. The app’s biggest appeal is that it helps you forget you’re even saving money. Once the money’s out of your account, you’re less likely to miss it being there and instead just work with what you have.
It’s user-friendly.The app sends you daily text reminders to let you know how much it’s taken out of your account and gives you the option to easily transfer funds back into your checking if you want to. This month, Digit also released a new feature called Boost, which amps up the level of saving during a particular period so you can reach your goals faster.
It has overdraft protection. Nobody likes unnecessary bank fees, especially because you didn’t have enough funds in your checking. Digit provides coverage for any overdraft charges you might incur from using the app, though its algorithm generally adjusts to prevent such low balances. As added protection, Digit also recently launched a low balance protection feature that transfers money from your savings to your checking when you’re below a certain amount.
Setting goals is simple. Last year the app released “Goalmojis,” which make it easier for you to specify exactly what you’re saving for. So instead of having one lump savings balance, you can see how you’re progressing toward saving for your vacation versus your rainy day fund.
Cons
There’s a monthly fee. There’s no way to get around it, the monthly fee is Digit’s biggest drawback. There’s a savings bonus of 1% on your balances that’s distributed every 3 months, but as Lifehacker points out, you’d have to keep an average balance of $3,600 in your Digit account to cancel out the monthly fee. However, as the average Digit user saves between $80 and $170 a month through the app, the $2.99 monthly fee is well worth it you wouldn’t save otherwise.
How it calculates your deposit savings is vague.If you’re someone who likes having control over the details of how much is going where and when, then the app’s uncertain algorithm might cause a bit of anxiety.
