Digit App Review: How It Works

According to the Bureau of Economic Analysis, the average personal savings rate in America as of June 2021 was around 9%. That means that people were saving around that much of their disposable income. If you’re following the 50/30/20 rule, you should be saving closer to 20% of your income. If you’re struggling to keep track of your finances and put some cash away for a rainy day, an app like Digit could help.

Credit.com’s Quick Facts About the Digit App

Digit analyzes your spending habits to understand what money you’ll need for bills and other purchases.
It uses that information to determine what will help you meet your savings goals and makes small transfers a few times a week from your checking into savings.
If your checking balance falls below a comfortable amount, Digit will move money back into your bank account to prevent an overdraft.
Data is encrypted for security and to safeguard your money and financial information, and your cash is protected up to $250,000 using the same level of digital security as governments and militaries.
Try it for 30 days free, then just $5 per month after that.

What Is Digit?

It’s pretty simple: Digit is an online service and app that helps you save money. When you sign up for the service, you answer a few questions and connect your account. You can also set unlimited long-term and short-term savings goals to work toward.

Once everything’s set up, Digit goes to work taking small amounts out of your checking account and moving them to savings every day. It can help you earmark those funds so you can see how well you’re saving for various goals, but you can withdraw funds at any time and use them as you see fit.

Digit App Features

Potentially the biggest selling point of Digit is the automation. It helps you save without actually thinking about saving on a regular basis. Here are some of the features and how they work.

Automatic savings. Digit uses machine learning to analyze your accounts for upcoming paychecks or predicted income, recent spending, and bills. Based on that, it determines an amount to pull from your checking account into the savings app account each day. You may not even realize you’re saving, but when you need money, you can look into your account to find it. Saving with Digit gets you a 0.10% annual Savings Bonus paid out every 3 months.
Overdraft prevention. You can create a ruleset to help keep your savings from causing overdrafts. You set a minimum for your checking account, and if the balance drops below that much, Digit doesn’t pull from your account. Instead, it puts money from your savings into your checking account to bring the amount up to your minimum. You can turn this feature on and off.
Savings controls. Digit makes it easy for you to determine how it saves money for you. For example, you can set a Safe Saving Level—as long as your checking account is above that amount, it will continue to save for you. You can also set a maximum daily savings amount, and Digit will never move more than that amount. You can even pause savings if you need to take a break from Digit. You can also create a manual save.
Invest with Digit. If you are a US citizen between 18 and 63 years old, you can use Digit to invest. You can set up a retirement account or an investing account, and Digit will analyze your finances to intelligently move funds to your accounts automatically. When you sign up for an investment account, you tell Digit what level of risk you’re comfortable with, and it will match you with a portfolio that meets your comfort level. Digit will match you to a Roth or Traditional IRA based on your income and age.
Direct Bank Account: In June 2021, Digit announced its “bank account with a brain”—a bank account that budgets for you. You can join the waitlist now to get early access to this feature as it goes live.

Pros and Cons of the Digit App

As with any money-management app, Digit may or may not be right for you. Here’s a quick look at some potential pros and cons to help you make a decision.

Pros of Digit

You don’t have to think about saving money, which might make you more likely to do it.
You can set rules to remain in control of the process.
You can set specific savings goals to keep you on track and invest in your future.
The 0.10% annual savings bonus pays out almost 2x more than the national average for saving.

Cons of Digit

You pay $5 a month for the convenience of using Digit.
Digit doesn’t notify you when it saves money for you, which might make some people feel less in control.
You have to check your accounts regularly and notate Digit transfers to ensure your personal books are balanced.

Other Options for Saving Money

If Digit doesn’t sound like an ideal solution for you, that doesn’t mean saving is off the table. Here are just a few other options you might consider.

A high-yield savings account. These types of savings accounts help you earn more interest than you might with standard savings accounts.
Apps such as Ellevest or Acorns, which help you save money and invest it for increased earnings.
Mobile banking options such as Chime*, which take paper and hassle out of the process to make it more likely you’ll manage your own savings transfers. *(Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.)