I pretty much never rave about things the way I’m about to now in this Digit review. (Unless you ask me about my trip to Antarctica – then I won’t shut up.) And I’m not doing so here for the $5 I’ll earn if you sign up through one of my links. I’m writing about Digit because it’s a super awesome way to painlessly save money, so read on for an introduction to a money-related service that I think you’ll love.
Digit is like magic
Ever wish you could save money like magic? Without having to think about it or spend a bunch of time setting things up? Or maybe you’d like to have a friendly little buddy do the saving for you, all while making sure you don’t actually need that money for anything. (You know, except for your future self and family.)
That’s exactly what the Digit savings account does for you. It automates your savings like magic, while keeping you updated daily on your checking account balance to boot. As a bonus, Digit is likeable. (When have you ever heard that about a financial service?)
How Digit works
Digit is really, REALLY simple to use. So simple that literally all you have to do is sign up and connect it to your existing checking account. (I think it took me 3 minutes to sign up while I was also taking screenshots of the process, so it’ll probably take you less time.)
Once you’ve signed up, Digit takes it from there, sending you daily (or weekly, or zero if you prefer) text messages about what’s going on with your money. For example, it texts me my current checking account balance every day, which is handy.
And it’s friendly, kind of like having a helpful little buddy to keep you informed about your money while it’s busy saving away for you. I can ask it stuff or move money via text at any time. (You can also log in to your Digit account on your computer to check on things and adjust them, or you can use their iPhone or Android apps, but I’ve never even tried any of those since the text thing is so handy.)
Now, I’ve automated my savings before, but nothing has ever been this easy or helpful. And if you don’t like the amount Digit is setting aside for you, you can text it and bam! it’ll save more or less for you or send the money back to you if you need it. (Like if you’ve reach your savings goal and are ready to use the money.) It can also update you on the bills you’ve got coming up, your recent transactions, and other stuff.
(Just text it “commands” to see what all you can do via text.)
I was nervous about the automatic part, but…
I’ve always been the kind of person who only automated certain things. For example, I have my cell phone bill automatically paid with my credit card, and then my credit card bill is automatically paid in full each month from my checking account. I do that because I have ADD and I don’t want late fees. (I can get a bill in the mail and set it down on my desk, meaning to pay it shortly and before I know it 45 days have gone by and I owe a fee. That’s bad, so I don’t do that any longer.)
The idea of a company randomly taking 89 cents here or $8.47 there (those are real amounts that were automatically transferred to my Digit savings for me) without me knowing about it ahead of time made me nervous. I like to know exactly what’s going on with my money at all times, and of course I don’t want any overdrafts. Back when I was paying off debt (and even more so when I was still taking on debt) my checking account sometimes got super low. Like down to less than a dollar.
But I bit the bullet and gave it a try anyway (for reasons explained in the next paragraph) and I am SO glad I did. Because the thing is, Digit has actually made me more on top of my money — both checking and savings — and I’m no longer nervous at all about it. In fact, it’s awesome!
Is Digit safe?
I’m also always a little (ok, more than a little) nervous about putting my money somewhere unfamiliar, but Digit sounded so great that I really wanted to give it a try. Plus, J. Money (of Budgets Are Sexy fame) had introduced me to Ethan Bloch, Digit’s founder, and so I got on the phone with Ethan and we talked about it in more detail too.
Ethan’s team has really put in the time and effort it takes to get something like this right, and they and their backers have absolutely got the experience and know-how necessary to do a great job. And as a former software QA person, I have to say I’m impressed from that perspective too. Normally I can find a bug or break pretty much anything software-wise without even trying, but I’ve encountered no issues with Digit in the 18 months I’ve been using it. Nada. Zip.
Each Digit savings account is also FDIC insured up to $250,000. It can connect with over 2500 US banks and credit unions, so as long as you’re in the US chances are high that that includes yours. Digit is free to try. If you like it and stick with it, there’s a $2.99 monthly subscription, which is WELL worth it if you ask me. It socks money for me that I wouldn’t have saved otherwise.
You’re probably wondering though, what if it screws up and puts money in savings that I actually need? Well, that’s where Digit’s no-overdraft guarantee comes in. I checked again just now and their guarantee says: “We believe so strongly in our math and our ability to safely identify money you can afford to save that if we overdraft your account, we’ll cover the fee, up to two times per customer.” (Plus I personally doubt that it would transfer too much, and it’s never done so for me.)
There’s got to be a catch, right?
Nope. Unless you count needing to have an existing checking account for the Digit savings account to connect up to.
As of the time of this writing Digit is also giving out “savings bonuses” to reward you for saving. (That’s somewhat like interest.) As their FAQ page says, “When you save with Digit for 3 consecutive months, Digit will automatically reward you with a 1% annualized Savings Bonus. No account minimums, nothing else you need to do.” I don’t know about you, but that sounds pretty good to me.
In my opinion the most important point of using Digit is that you WILL be painlessly saving – automatically – money that you might not otherwise be. Money you could use for emergencies, to save up for something special, or to toss in chunks toward the top debt in your debt snowball.
What using Digit has been like so far
I was especially curious to see what would happen with my particular checking account. You see, Digit works best with active checking accounts and mine is…not so much. I typically have 6-15 transactions a month in it since I run the majority of my expenses through a credit card that I then pay in full each month. I wasn’t sure that would be enough for Digit’s algorithm to learn about my money needs, but it’s managed :)
The very first month I tried it, Digit automatically saved me $40.15. I thought it could be more, so I played around with it and increased my savings. Since then, it’s saved up quite a bit for me at my request over the past year and a half. (Once I reach my savings goal, I’ll be making plans for a trip to Africa!)
If you’d like to try it out, just click here
If you’d like to try it out — for an emergency fund, for something fun, or just to see how it works — all you have to do is go here, enter your name, email address, and a password, and click sign up. From there, this is what you’ll see:
Type in your cell phone number and hit continue. They’ll text you, and you’ll need to input the confirmation code:
Submit that puppy and it’ll ask what bank you use:
(Don’t worry, that’s not the whole bank list. You can search for yours if it doesn’t show up right off the bat.)
From there, you’ll sign into your bank account. (Remember, they use “state-of-the-art security measures. Your personal information is anonymized, encrypted and securely stored.”) If you have more than one checking account with them, it’ll ask you which one you want to connect to Digit. And that’s it:
Now you can interact with Digit using commands on your phone. (The choices are savings, balance, recent, bills, withdraw, save, pause, settings, and commands.) You can also tell it thank you, and it will reply with you’re welcome. It’s very polite while it saves away for you.
If you sign up for Digit, let me know. I’d love to get your opinion too :)