Saving money has a lot in common with flossing: you know it’s important, professionals wag their fingers at you when they find out you’ve been neglecting it, and it seems like a major pain to get in the habit of doing.
Luckily for reluctant savers, technology has come to the rescue in the form of automatic savings apps. (Unfortunately, automated flossing technology is still years away.)
Even the most budget-averse user can automatically grow their wealth using one of these apps.
Each of the following savings apps has a different approach to automating your finances.
Read on to see which one will work best for your wealth-building needs.
If you want to save money without ever having to think about it, Digit is for you.
This completely free program syncs with your bank accounts and analyzes your cash flow. Every two to three days, it will determine an amount of money (between $5 and $50) that is safe to transfer into an FDIC-insured Digit deposit account.
Digit is so confident in its safe-to-withdraw algorithms that it offers to pay overdraft fees if a transfer leaves you overdrawn. You can request money from your Digit account anytime and you will generally receive it the next business day.
Digit communicates with you via text message, and you must sign up online, as it is technically not an app. You will receive a text message once per day with your current bank balance. You also have the option to receive more detailed text check-ins, which allow you to see recent debits. This can give you a no-effort daily snapshot of your finances
The big downside to Digit is that you will earn no interest on your deposit account, since the interest earned in those accounts pays for the program’s operating costs. This is how the program remains completely free.
Pros: Saving is not only automatic, but also painless. Your money is easily accessible if you need it and you don’t pay a penny for this program.
Cons: The lack of interest earnings on your savings makes it tough to really grow wealth with Digit.
Best for: Beginner savers or those who hate dealing with money.
Be sure to check out PT’s review of Digit.
Acorns links to all of your spending accounts, including credit cards, checking accounts/debit cards, Paypal, and the like, and rounds up each transaction to the nearest dollar.
Once you have reached a minimum of $5 in roundups, the money is transferred into an investment portfolio, which the app helps you to choose by asking you a series of questions.
The five portfolio options include index funds from investment firms such as iShares, Pimco, and Vanguard.
In addition to the roundup option, you may also set up a recurring transfer on a daily, weekly, or monthly basis, or you may make single lump sum transfers.
You have the option of withdrawing your funds from your Acorns investment account at any time, and the money will arrive in your checking account within five to seven business days. There is no limit on how much you can withdraw.
Acorns has two different fee structures. Users with more than $5,000 in their investment portfolios will pay 0.25% of their holdings per year. Those who haven’t hit the $5,000 mark pay $1 per month for the service. This cost can be pretty steep for Acorns beginners. For instance, a $200 portfolio will pay $12 over one year—which equals a painful 6% fee.
Pros: Using the roundup aspect of Acorns’ savings platform can make saving (and then investing) money painless. The investment portion takes the confusion and intimidation out of investing, in addition to lowering the cost threshold. Additionally, the customer service is reported to be excellent.
Cons: The fees can be quite steep for those just beginning. You do still need to keep track of your finances to make sure the roundup feature or recurring transfers do not overdraw your accounts or overload your credit card.
Fees: $1 per month for accounts below $5,000, 0.25% of your holdings for accounts above $5,000.
Best for: Those new to investing who have a good handle on their budgeting.
Be sure to check out our review of Acorns.
After you receive each paycheck, Rize automatically moves money from your checking account to your Rize account. Each time you save money, Rize sends you a notification via text or email with an update on your progress.
The program also helps you choose a savings amount that fits with your age, income, and location, and it suggests smart financial goals that match your situation—although you can always create your own custom goals. Rize also helps users by suggesting increases to the amount saved each month as your circumstances change.
To make sure Rize does not overdraw your checking account, the program notifies you of the transfer a few days before it happens, giving you time to pause the transaction. Rize also automatically double-checks the balance in your checking account before the transfer to make sure you have sufficient funds. (The website is coy about what happens when it finds an insufficient balance in your checking account. I suspect it pauses the transaction and contacts you, but the details are not clear).
Your Rize account is a savings account, which will earn 0.30% APY interest, although rates are subject to change. As a savings account, Rize also offers SIPC insurance protection up to $250,000, similar to FDIC insurance of the same amount in a traditional bank. You may withdraw money from your Rize account at any time.
By far the most unusual aspect of Rize is how it handles fees. There is no set monthly fee for the program, but Rize asks users to contribute a small amount of the money you save each month—the exact amount is up to the user.
Pros: Rize makes it easy to pay yourself first, and it offers a modest amount of interest (which is higher than the national average for savings accounts). The progress updates sent via text or email help keep your goals front and center.
Cons: Rize currently does not have an app, although one is in the works. The pay-what-you-think-is-fair fee system could be a benefit or a detraction, depending on how you look at it.
Fees: Rize asks for a voluntary monthly contribution of your savings, at an amount set by you.
Best For: Beginning savers and/or budgeters.
Bank of America’s Keep the Change
Bank of America’s savings program is the granddaddy of modern automatic savings apps. Keep the Change was launched in 2005 for Bank of America customers, and it is still going strong. In order to qualify, you must have a Bank of America checking account, debit card, and savings account.
Like Acorns, Keep the Change rounds up each purchase you make with your Bank of America debit card, and places the change in your savings account. For instance, if you spend $4.17 on a cup of coffee and a muffin, $0.83 will automatically be placed in your savings account, and your checking account will be debited for a full $5.
If you do not have enough funds in your account to cover your Keep the Change roundups for the day, Bank of America cancels the Keep the Change transfer for that day in order to protect you from overdraft. Also, if you end up returning an item or having a purchase canceled, the Keep the Change transfer associated with that purchase does remain in your savings account.
The Bank of America savings account where your money is transferred does accrue interest, although the current rate for a regular savings account is a whopping 0.01% APY. You can access your money in that savings at any time.
Bank of America offers a mobile app that will allow you to monitor your Keep the Change savings, along with your other banking.
Pros: Automatic transfer allows for painless savings, and checkbook balancing becomes easier because every purchase is a whole number. Bank of America cancels Keep the Change transfers that would overdraw your account.
Cons: Keep the Change is only available for Bank of America customers. The interest rate is very low, and you might need to transfer money occasionally to higher interest bearing accounts.
Best for: Bank of America customers. If you already bank with B of A, it makes sense to try the in-house automatic savings app.