What Is Digit?
Digit is a microsavings platform designed to help you save small bits of money over time. As with Acorns, you won’t get rich off the money you save with this service, but it does initiate that first step toward creating a savings habit and building wealth.
“Digit believes anyone can start saving regardless of income,” says CEO Ethan Bloch. “While everyone understands the importance of saving, it’s hard to get started. Digit’s goal is to make saving as easy, stress-free, and automatic as possible,” explains Bloch.
“Digit fits into the lifestyles of people who grew up on the web and look to technology, like Uber, Instacart, and Venmo. They trust tech and use it daily to simplify their lives,” says Bloch. In other words, if you’re looking for a tech-assisted automated process to start saving, this service allows you to do this with zero effort on your part.
You can use the money you save in your account for a summer vacation or small emergencies like car repairs. Because of Digit’s micro-savings format, it’s not likely it will propel you towards a car or a down payment on a new home.
More recently, they have begun offering robo investing services for more long-term financial goals. The company offers both tax-advantaged retirement accounts and taxable brokerage accounts. Rather than picking individual investments, customers can choose between diversified ETF portfolios based on their risk level. And later this year they even plan to offer a banking service in partner with MetaBank.
|Mobile Access||iPhone App, Android App, Blackberry App|
- Digit Savings Bonus — All customers earn a 0.1% annualized Savings Bonus for every three months that they save with Digit.
- Same-Day Transactions for Chase and Wells Fargo Clients — If you use Chase or Wells Fargo bank, you can receive same-day transfers to and from Digit.
How Does Digit Work?
Digit evaluates your spending habits and transfers money from your linked bank account into your account. In my experience, the average transfer each time is around $9. Sometimes it’s as much as $14 or as little as $2, depending on the balance in my personal bank account. Digit Savings are FDIC insured up to $250,000.
But in addition to their savings feature, Digit is also planning to offer a banking feature called Direct later this year in partnership with MetaBank.
With Direct, you'll get access to both spending accounts, bill accounts, and a debit card with access to 55,000 fee-free ATMs. Plus, it will make the other savings features of Digit even easier to manage. The spending account is the main banking account, while the bills account allows you to save and set aside money for your monthly expenses. And ofcourse they plan to offer a savings section, which will work similarly to how goals currently work in Digit.
While Direct is not yet open to the public, you can sign up for the waitlist.
How Does Digit Make Money?
Digit charges $5 per month for their service. Your $5 monthly fee gives you access to all of Digit’s services, both saving and investing. Digit doesn’t charge a percentage-based fee on your investments.
Digit isn’t set up for large savings goals. Since the withdrawals are based on the money in your checking account, unless you have an outstandingly large bank balance, your savings will be minimal. Digit was created to help anyone save money, no matter your previous savings history or bank balance.
What Would Make Digit Better?
With its simplistic idea, Digit is focused on helping you save small, affordable bits of money each week. You won’t get rich using Digit.
They’re honing in on the tech-savvy Millennial marketplace with their innovative text-message savings feature and habit-forming method of getting you to save money regularly.
One thing that would make Digit better is to have a more concrete formula for calculating your savings transfers. Their current method is much too vague and actually turned me off to their service in the beginning. I tested it out only because a trusted friend used and recommended their service. If nothing else, they do offer a no-overdraft guarantee on your checking account.
Digit Pros & Cons[table “proscons” not found /]
Is Digit Safe?
Digit takes plenty of security measures to keep your money and personal information safe. The company uses state-of-the-art security measures, ensuring your personal information is anonymized, encrypted, and stored securely. Additionally, Digit is an FDIC member, meaning your money is insured up to $250,000 per person per account type
Is Digit Legit?
Yes, Digit is legit. While there’s no guarantee of investment performance, both the saving and investing features of Digit are legitimate, so you can rest assured you aren’t being scammed.
Is Digit Worth It?
Whether or not Digit is worth it depends entirely on you and your personal financial situation. People who struggle to save money on their own might find Digit’s savings features extremely beneficial. On the other hand, those who have no problem saving might not find the $5 per month worth it.
Similarly, you’ll have to look at your own situation to determine if Digit’s investing services are worth it for you. No matter where you invest, you should always pay attention to any management fees you’re paying. Digit's $5 fee covers its investing services no matter how much you have invested. However, you should also pay attention to the fees on any individual investments your money is in. You might find that $5 is a great deal, or you might decide you could save more by going another direction.
Digit Competitors & Alternatives
Bettermentrobo advisor designed to help customers build wealth in a variety of different types of brokerage accounts. Like Digit, Betterment automatically chooses your investments based on your risk tolerance, but it considers a greater number of factors when choosing investments, including your financial goals and time horizon. Betterment also offers a no-fee high-yield savings accounts
Rather than a flat fee like Digit, Betterment charges an annual percentage-based fee of 0.25% of assets. Which one is cheaper depends on how much you have in your investment accounts. For amounts of about $20,000 or lower, Betterment’s fees are cheaper. For amounts greater than that, the $5 flat monthly fee is a better deal.
Betterment may be better suited to those who are more focused on investing for long-term goals than for saving. While they don’t have the same automated saving features that Digit does, the company’s investing tools and options are more robust.
Acorns primary feature is still its round-up feature. You can set your account to round up each purchase and deposit the excess change into your investment account. To use just this feature, Acorns charges a fee of $1 per month. To upgrade your account to include retirement investing and checking, it will cost $3 per month. Finally, adding a custodial account will cost you $5 per month.
To get similar features, Acorns offers a more affordable monthly fee. However, they don’t offer savings accounts. If increasing your savings is your ultimate goal, Digit is likely the better option.
Stashinvesting app that allows customers to grow their wealth through a variety of types of accounts. Stash is well-suited to more hands-on investors. It allows customers to buy individual stocks, and even buy fractional shares. As a result, this company might be most well-suited to those who prefer to choose their own investments.
Stash also offers online banking that, like Digit, allows you to designate certain savings goals and track your progress toward each one. It also offers a unique banking perk where when you use your Stash debit card to shop at well-known brands, you’re rewarded with a piece of matching stock to help grow your investment portfolio.
Stash offers three different plan options.
- Its cheapest plan is just $1 per month and includes investing and banking services.
- When you upgrade to the $3 per month plan, you get tax-advantaged investment accounts, a “smart” portfolio, and personalized retirement advice.
- Finally, the $9 per month plan comes with custodial accounts, banking bonuses, and $10k in life insurance.
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|Socially Responsible Investing|
Final Thoughts on Digit
I am now a believer in their service and recommend you check it out as well. Like Acorns, I’m viewing it as a diversified stream of my financial portfolio. Along with using Betterment for my retirement needs, Digit adds a bit of fun to the mix for short-term savings goals.Disclaimer - Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures.
Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.
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