DIGIT. When I first signed up for Digit, I didn’t even entirely understand what it was.
I know, I know—it’s not the smartest to sign up for something you know little about, especially when it involves your personal information. But I signed up under recommendation of a fellow entrepreneur, so it wasn’t a complete lack of judgment. 🙂
A day after I signed up, I received the following text:
To be honest, the winky face kind of freaked me out! I later realized that was Digit’s logo. Hah. I decided I was going to cancel then, but wanted to give it a shot for a few days first.
Well, here we are two months later and I still haven’t canceled my Digit account. Why not? Well, to be honest, it’s really grown on me and it’s saved me $223.62 so far with absolutely 0 effort on my end.
Here is the scoop on Digit- the service behind the winky face- the pros, the cons, and whether or not it’s for you.
THE FREE SERVICE BEHIND THE WINKY FACE
What is Digit?
Digit is a free online service that analyzes your income and spending, and finds small amounts of money it can safely set aside for you. Every 2-3 days Digit makes a small transfer from your checking account to your “Digit savings account”. That money continues to compile until you decide to transfer it back to your checking account.
How much does Digit save for you?
Digit uses an algorithm to track your income and spending and will save for you based off of your habits. The transfers Digit has made for me personally the past 2 months have ranged anywhere from $4.02 to $27.98. When I have less money in my bank account, Digit saves less for me. When I have more money in my bank account, I notice more money is saved for me. Below is an example of my recent “savings” so you can get an idea.
PROS OF DIGIT
- It’s FREE!
- You don’t have to have a smart phone to use Digit. You can register through Digit.co on your desktop if you’d like and use it that way.
- Sets money aside whenever it decides you can “afford it” by analyzing your bank account (don’t worry, they are so confident in their algorithms that they offer overdraft protection and will cover up to two overdraft fees per customer if this ever happens).
- You can transfer the money from your Digit account back to your bank account whenever you’d like for free. Literally all you do is send a text message (or submit a request via the website or app). Digit allows unlimited transfers, with no minimums, and no fees. It will arrive the next business day. I did cash out once to make sure I’d really get my money, and the process was very quick and efficient (AKA, it worked!).
- It’s easy to pause savings (turn off automatic savings) or save more or less aggressively- just update your settings.
- If you don’t have access to online banking on your phone (or are lazy), you can take advantage of the daily texts sent to you with your bank account balance. If you want, Digit will even tell you your most recent transactions.
- Digit has a nice referral program where it will deposit $5 into your Digit account for every friend you refer with your referral code.
CONS OF DIGIT
- The algorithm is a mystery and a little unpredictable. In other words, while you can trust their algorithm, you never know how much Digit is going to take from your account until it’s already been done.
- There are no options to set goals. While this certainly doesn’t inhibit you from saving, the service doesn’t provide the motivation and encouragement to work towards a specified goal. Of course, you can always just mentally keep that goal in mind, but sometimes its nice to see it visualized with reminders like “Half way there to your emergency fund!” “Only $200 away from your new laptop!” “You’ve now saved 25% of this year’s Christmas fund!” etc.
- The daily texts (which may be a “pro” to some) can get a little annoying. Everyday I receive a text that starts off with “Bonjour Mallory!” “Yo Mallory” “Ciao Mallory” “Namaste Mallory”….you get the picture… with my bank balance and the option to see transactions. Some people might appreciate this, but for me, I’m the type of person who will just log onto my banking account if I want to know my balance. There is a way to adjust your notification settings, but for some reason it hasn’t worked for me, so I need to contact them. Until then, I’ll continue to brush up on my language skills of learning “hello” in every language possible… It’s a small price to pay 😉
DIGIT MIGHT BE FOR YOU IF…
- You have a steady stream of income and want to effortlessly save money (or more money in addition to your “already in-place” savings schedule).
- You like being “pleasantly surprised” to see how much you’ve saved (for example, I’m thrilled to currently have $177.79 in my Digit account. I’m not positive what the money is going to be used for yet, but it’s nice to know it’s there).
- You want to save up for a purchase, but struggle being consistent. While the amounts Digit save may vary from day to day, you can trust that Digit will keep saving for you as long as you have a stream of income,
DIGIT MIGHT NOT BE FOR YOU IF…
- You don’t have a bank account in the USA. At this point, those are the only bank accounts supported by this platform. According to their website they hope to expand internationally in the future.
- You don’t have a steady stream of income or your bank account is always dangerously low. As mentioned above they do have the overdraft guarantee, but you may not want to risk it.
- You are wary of giving out your bank information. Digit does require connectivity to your checking account. However, according to their website, “Digit uses state-of-the-art security measures. Your personal information is anonymized, encrypted and securely stored.” They use 128-bit bank-level security and don’t store your bank login. Additionally, “All funds held within Digit are FDIC insured up to a balance of $250,000.”
- You like to know where and when your every dollar is going. As mentioned above, their algorithm is a little unpredictable, so you can never know exactly how much Digit will save for you until the money is already gone from your checking account.
- You want to earn interest. Yup, you won’t be paid any interest (which actually doesn’t surprise me at all). As a free service, this is how they make money; they essentially invest your money and keep the interest for themselves. Because I’m not saving gobs and gobs of money anyways, I don’t think I would be making much interest regardless of whether or not I stored my money in an account that offered interest. But that’s just my take on it.
If you don’t feel that Digit is for you because of some of the above reasons, stay tuned for a future post about another digital savings platform that saves for you, but with much more predictability.
All in all, I have to say that I am impressed with Digit as a platform. As I mentioned above, I love the fact that I have almost $200 sitting in a savings account that I never even kept track of. It essentially just “appeared magically”. Obviously this isn’t truly the case, but I love the fact that Digit has saved me that decent amount by saving little by little for me. It’s been money that I haven’t “missed” in day-to-day life, and it’s now compiled to a somewhat substantial amount. So really, I have no complaints. If you, too, would like to save money with 0 effort, I suggest signing up and trying it for a month to see how much you save. Whether you are trying to save for an emergency fund, vacation, holiday season, or anything else under the sun, there’s no doubt that Digit can help you successfully save!
You can sign up for Digit HERE or by clicking any of the links above. That’s all for now. Happy saving!!