Ash The Great | Oct 31, 2017 | 0
Digit Review – Save Money Automatically With The Digit App
The Digit app tries to help you save money automatically in a way that removes you from the process. It checks your spending habits and then moves money from your checking account over to your Digit account so long as you can afford it. You are paid 1% annually, which is not terrible in this day and age, and you are paid interest every three months.
The app figures out how much you spend on a daily basis and uses that amount to figure out how much you should save. If you do not like the automatic nature of the program, then you are able to switch off the automatic side and manually add money to your saving account.
The company promises that your transfers will not cause your payments/direct-debits to overdraw your account. They promise to pay your overdraft fees if it does. Withdrawals take one business day, and the app notifies you each day on how much is in your checking account and how much it has drawn out to add into your saving account.
Digit App – Pros
- Withdrawing is not as difficult as you may think. You may have trouble if you try to withdraw more than six times per month, but otherwise it is fairly easy to withdraw your money.
- There is a free 100-day trial that allows you to try out the app to see if you like it. It helps you get used to things such as the notifications in the morning and the passive way it helps you save.
- You are able to set a limit on how much is taken from your account. This includes a minimum balance limit. For example, if you do not want the app to take out money if you have less than $200, then the app will not take out any money until your account balance goes above $200 again.
- There are no charges for withdrawing money from your Digit account, and there are no account minimums with your savings account.
- Surprisingly, the funds you hold in your Digit account are FDIC insured. This means you are covered if the company holding your money goes under. You are covered for amounts up to $250,000.
- The company is still too young even at this stage to tell if it is playing fast and loose with people’s information. Nevertheless, if we give them the benefit of the doubt, we do know that they protect your account with a bank-level SSL 128-bit encryption.
- Digit actually backs up its promotional blurbs with links to the articles that made the positive claims. The Internet is rife with websites that claim Forbes, US news and many others recommended them without any proof over than a logo symbol. Digit actually gives you links to the famous websites that have promoted their app.
- It monitors how much you earn and how much you spend on a daily basis, and then it takes out money according to how much it thinks you have under spent today. For example, if you have a particularly quiet week where you spend far less than you would normally, then the app removes more money from your account than it normally would.
Digit App – Cons
- The Digit developers are trying to fix the problem, but there has been a persistent issue with credit unions. For some reason, there are certain credit unions that will not connect with the Digit app and people receive error messages as a result.
- Some people have had a hard time canceling their account. I do not think this is part of a scam where they sucker you in with a free trial and then make it difficult to quit. Still, it is a little annoying and hopefully is not an indication that they are going to try the old free-trial-difficult-to-get-out-of-paid-account trick.
- Digit seems great at syncing with some bank accounts and not others. Many people have a daily sync between their bank account and their Digit app, but some people see a lag of between four and five days. For example, their paycheck is deposited and it takes between four and five days before it shows in their Digit account.
- Some people have complained that the Digit app only takes money out of their account once per month. This is obviously not good enough if the app is charging $2.99 per month. Make sure to monitor your account during the free trial and during your paid subscription. If it is only taking out money a few times per month, then contact the customer service department or cancel your subscription.
They Charge A Monthly Fee
At the time of writing, the monthly fee is $2.99 per month. That is $35.88 per year. That means that you are making a loss by having and using the Digit app unless you have around $3588 in your account for a full year.
This is obviously not a good thing since many of the Digit app users will not have that amount in their Digit savings account for a full year, but Digit are not selling their service on the back of their interest rate.
The Reason Why You Should Use The Digit App Even If You Are Paying A Monthly Fee
Digit are not selling their app on the back of their saving interest rate. They are selling it on its ability to help you save passively. They are taking you out of the picture, which means you do not need to maintain discipline or willpower in order to save. You are saving behind your own back because Digit is drawing amounts from your checking account without you noticing.
You may be making a loss with regards to the monthly fee if you have less than $3588 in your account, but at the end of the year you are more likely to have money in your savings than if you didn’t have the app.
The last paragraph is directed at a certain portion of the population. I know there are plenty of people who are able to save money without needed help from an app. However, there are many people who cannot save money without help. There are many people who need a third party to slowly siphon money out of their account without them noticing. Digit does just that, it takes out portions of your money that it figures you can afford.
Conclusion – A Fine App For Passive Saving
If you are the sort of person who has a hard time saving because you have no willpower, or no discipline, or because you forget to save, or because you miss the money too much, then Digit is for you.
I would say you have a choice to make between either the Digit app or the Acorns app. The Acorns app does a similar thing except that it rounds up your account rather than tried to figure out how much you should be saving.
Before you sign up with the service, you should check online to see if people are complaining about being unable to cancel their account. If they are not, then try the free trial for 100 days and see if the Digit app is right for you.