This is a part of our review series. For a full list of recommended products and services, check out the Resources page.
For the last few months, I’ve been raving about Digit to friends, family and my Periscope followers.
What is Digit, you ask?
It’s a service that basically tricks you into saving money. You link your bank account to Digit and then Digit takes out tiny amounts of money that are then deposited into a savings account. It’s literally a few cents here and a few bucks there, and over time you become surprised to find hundreds of dollars in your savings account.
How do I know this is true?
Because I’ve been using it for months and have already saved nearly $1,000 simply by using Digit. That’s enough money for a nice emergency fund, a refurbished Macbook Air or to pay down any outstanding credit card debt – and it was all done painlessly.
Simply put, Digit is an awesome tool for anyone who hates saving money, sucks at saving money or simply wants to make sure they are optimizing their savings as much as they can.
How Digit Works
Digit does the heavy lifting of saving money for you. You literally don’t have to do a damn thing after setting up the account.
Simply visit Digit.co, sign up for an account, link your bank account and let Digit take care of the rest. From there, their robots analyze your income and spending habits to figure out the amounts of money you won’t even realize have gone missing. Those amounts are then transferred from your checking into your savings account.
(Note: Some of you have expressed concern about over drafting. I’ve been using Digit for months and I’ve never had that problem. In fact, I noticed that if my checking account balance gets low that Digit either stops the transfers or only takes out a few cents. If they do accidentally overdraft, they have a “No Draft Guarantee” which means they’ll cover any costs incurred in case of an overdraft.)
The cool thing about Digit is every time you log in to check the balance you’re always surprised by how much is actually in there. Seriously – these small deposits really add up over time. From December 2015 to mid-February 2016 Digit had saved me nearly $500 of money that would have just sat in my checking account collecting dust or gotten spent.
Pros of Digit
Digit has a lot going for it. Quite frankly, it makes saving money actually feel good. Because it’s so painless and because you feel awesome every time you see your balance, I believe it’s something that’s really needed in order to show Americans that saving can not only be easy, but also feel amazing.
Below you’ll find some of the other pros:
- It literally takes 2 minutes to get signed up and link your bank account. Sign up here.
- FDIC insured
- Information is secure
- No need to set up a new savings account, you automatically get one when you sign up.
- Withdraw the money any time. (It takes a day for it to transfer.)
- You can set a minimum limit so that Digit doesn’t withdraw when your checking account is at the limit.
- You tell Digit what to do via text.
- You get $5 for every referral
- It texts you your checking account balance every day.
Cons of Digit
Nothing is ever perfect, and Digit isn’t an exception here. The main con is that they don’t technically pay interest.
They do, however, give $0.05 for every $100 you have in the account for at least three months. It may be a little weird, but interest rates for savings accounts aren’t great anywhere anyway.
Other cons include:
- Some banks still having issues connecting.
- It’s only U.S. based for now.
How I Personally Use Digit
Digit is my new “Money for Me” account. If you’ve been following this blog for a while, you know I like Kate Northrup’s concept of a Money for Me account. This is basically money set aside for you to do whatever the hell you want with without feeling guilty.
Because I’m pretty good about saving money, I decided to use my Digit account for my guilt free spending money. At this point I’ve only withdrawn money from the account to replace my broken iPad and to donate some money to charity.
Overall, I think Digit is an extremely valuable asset to have in your financial tool box. It makes saving money painless and easy.