Since launching the FinCon FinTech Startup Competition, I’ve been exposed to a number of new tech companies with great ideas to help you with your money and investing. One of my favorites to come along is Digit. I’ve been using the service for 5 months now and I’m ready to give my Digit review.
Digit (digit.co) is a service that helps you automate and separate your savings (you guys know this is right in my wheel house).
Digit connects to your checking account, automatically and algorithmically withdraws small amounts every few days (depending on your balance and spending habits), and deposits the funds into a separate, but non-interest bearing savings account.
I signed up for the service on January 15 of this year. In these last 5 months Digit has made 48 transfers and I’ve saved $1,191.90.
Why Would You Do This?
- Because saving money is important.
- Because you want to kick start an emergency fund, vacation fund, Christmas gift fund, or whatever.
- Because you’re having trouble making progress with your current savings methods (manual transfers, waiting till the end of the month, etc.).
- Because you care about results more than interest rates at this time. Although Digit does pay a 1% annual bonus (paid out every 3 months) on your balance.
- Because automating and separating your savings works! And your boy PT preaches it regularly.
How Does Digit Really Work?
When you connect Digit to your checking account, it starts analyzing your balance and spending overtime. After a few days, Digit will transfer a small amount from your checking account into your Digit account.
“In my case, I opened my Digit account on January 15th and my first transfer ($14) happened on January 22nd. Over the course of these 5 months I’ve averaged a $25 transfer every 2.62 days.”
Digit uses an algorithm to determine how much is safe to transfer out of your checking account. From my experience, it starts slow and small and as it gets more comfortable with your spending habits it starts to ramp things up.
You have full control over Digit at all times. You can tell it to pause, save, withdraw (from your Digit account) at any time.
Digit uses your phone’s messaging to inform you of the progress and to allow you to control the account.
You still have access to a browser-based dashboard where you can pause saving, close your account, or change your connected bank accounts.
Can You Trust Digit?
If Digit overdrafts your checking account, they will pay the fee.
How Do You Get Started?
To get started, head to Digit.co and sign up. You’ll need to connect your current checking account and give Digit your phone number and email address. Get started and let me know what you think in the comments below.
Note: Digit has a $2.99 monthly fee and they pay a 1% annual bonus out every 3 months. Keep $3,588 in the account and the bonus negates the monthly fee.