Digit review: effortless savings with an unfortunate new change

Back all of two weeks ago when I decided to start this blog, I had the idea that I’d do a series about the fun money-saving apps I use to both save up for specific things and to boost my savings effortlessly. After all, I’m a millennial with a smartphone so it’s only natural I use these things, right? (I would say that’s a hilarious joke because I didn’t even get a smartphone until a month after I graduated college so I’m still relatively new to this scene, but it turns out joke’s on me because I’m just as addicted as I assume all the cool kids are who got theirs back in high school and college. That’s one of the reasons my personal Facebook account has been deactivated for something like 5 months now, but I digress).

Well, I’m putting the horse before the cart here because this post is about why I’m going to stop using one of said magical money-saving apps.

Digit is the first money-saving app I ever signed up for. You connect it to your checking account, and then it analyzes the patterns of your income and spending and automatically saves small bits of money (usually between $2 and $50) for you here and there based on its algorithms. Digit is so sure that they will only ever save an amount you won’t miss that they will cover your first two overdraft fees if the app causes your balance to get too low.

It draws this money out of your checking account and into a savings account that they own; like with “real” banks, you’re FDIC insured for up to $250,000. Historically Digit was free because they were making money by pocketing your interest: every three months you’d receive a “bonus,” which was 0.20% interest of your average balance over that time period. This was paltry but I sure wasn’t complaining because the app is good at what it does and I’m pleasantly surprised any time I log in to check my balance since I don’t even really see that money coming out of my checking account. Here’s what Digit has saved for me in the last few days:

The appeal of Digit is that it’s effortless on your part, and that’s reflected in the user interface, which is very obviously geared toward millennials: you communicate with Digit via text message (or via the app). For example, you can text Digit “savings” to see your savings amount, “pause” to have it stop saving, “save more” or “save less” to change how aggressive Digit is, and “save 5” to automatically transfer $5. Digit also texts me every morning to tell me what my checking account balance is:

I have some issues with Digit, mainly that if my spending changes, it freezes up and has to re-analyze everything. It took about two weeks last year for it to start saving again after I went to the beach for a week with my family and spent $0 during that time. For a few months at the end of last year I was doing a challenge where every day I would send the amount of money corresponding to the day’s date to my Digit account: December 1st I saved $1, December 2nd I saved $2, etc. Did you know you can save about $500 a month that way? Yeah, it’s awesome. But I stopped doing that a few months ago, and Digit took about two months to re-analyze after that (and I’ve added in another app or two during that time that routinely takes money from my checking account, which probably didn’t help). This is a fairly minor if annoying issue, though, and I was very happy to see my account resurrected in the last week or two when it started saving automatically for me again–until I got an email from them yesterday with the ominous subject line “Charging for Digit.”

One of the two service changes announced in that email and the good news is that your savings will now be earning 1% interest (they still call that  your “savings bonus,” not interest). That’s better than the $0.05 per $100 quarterly “bonuses” you got before! The drawback, though? Digit is now charging $2.99/month after an initial 100 day free trial period. From their email, this is because

“we’ve decided to make a conscious decision about how we want to make money: We work for you, and you pay us. It should be that straightforward. Too many financial services complicate things by making money doing things not in the best interest of their customers. Charging for Digit will allow us to support our service while making sure we always do what’s right for the customer.”

That sounds fine, right? After all, $2.99 is not really a lot of money at all, and you’ll probably save more than that in your first transaction. However, I’m not used to paying fees for my money: back in high school I opened free ING Direct (now Capital One 360) checking and savings accounts and most of my cash is still with them to this day. I also recently opened another savings account at Ally bank (also free) because I earn 1% interest there, which is slightly higher than Capital One at the moment. Wait, what’s that? My Ally savings account pays me the 1% interest that Digit now will, except that I don’t have to also pay $2.99 for my account there? Yeah. Granted Digit is effortless saving, but maybe this is incentive to set up automatic transfers to that bank account to offset the loss of this app.

Digit isn’t helping me save for retirement: I’ve saved (and transferred back to my checking most of) $3,056.49 since I joined at the beginning of June last year. That’s really awesome and very likely an extra $3,000 I might not have saved on my own, but we’re talking small-emergency-level amounts of money saved with this app. For example, I very vividly remember transferring the exact amount of my car registration from my Digit account back to my checking account. And because these aren’t huge numbers in the grand scheme of things, I can’t justify now paying $3/month, especially when I do use two other money-saving apps that are still free. Once/if those start charging, I’ll maybe eat my words and come back to Digit. But for now I will let Digit do its thing and with a heavy heart will close my account when I have to start paying for a monthly subscription in 99 days.

However, don’t let my opinion dissuade you from trying it. If you’re struggling to save and this sounds like the perfect thing to effortlessly change that, Digit might very well be worth the $3/month subscription for you! If you want to try it out, you can sign up for Digit here and then decide at the end of the 100 day trial whether or not to keep using the app.

9/14 update: I just closed my account a few days ago. I’d already gotten an extra two months free because I’d reached out to customer service about the fact that Digit was going for weeks without saving anything for me. But that time was about to run out, and it had yet again been a month since Digit had saved anything. I had it set to the most aggressive savings level, but for some reason it couldn’t keep up with the way my money moves around in my checking account well enough to feel like it could actually withdraw anything safely. I like the app in theory, but it was no longer working for me in practice, and I absolutely was not about to pay a fee for a service that wasn’t working.

Leave a Reply

Your email address will not be published. Required fields are marked *