Digit Review – Automated Free and Easy Way to Save Money

What is Digit?

Digit is a money saving service.

It has been on my to-do-list to give Digit a try for a long time and I finally decided to give it a try.

 

How to sign up for Digit?

You sign up with Digit with your name, email, cell phone number, and link your bank checking account to Digit.

It took me two minutes to sign up. I mean SERIOUSLY! You can’ t beat that level of simplicity!

Honestly, it was as simple as signing up for a newsletter subscription.

Their website is plain vanilla bare bones – no bells and whistles – and is super easy to sign up and use.

 

How Does Digit Work?

Once you sign up and connect your checking account to Digit, it uses a proprietary algorithm to perform cash flow analysis.

If it determines there is idle cash that can saved, it will move a small amount of cash (usually between $5 – $50)  from your checking account to your Digit account.

You will see it saving money 2 to 3 times per week from your checking account to your Digit Account.

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Does Digit Offer Overdraft Protection?

Digit is confident about their algorithm.

They offer to pay for overdraft fees two times per year per customer if they end up over drafting your checking account.

That is an excellent way of backing their claim or confidence on their cash flow algorithm.

 

Is Digit FDIC Insured?

Yes, your Digit account is FDIC insured.

Here is an extract from Digit website – “Digit uses state-of-the-art security measures. Your personal information is anonymized, encrypted and securely stored. All funds held within Digit are FDIC insured up to a balance of $250,000.”

 

Does Digit have any fees?

100% free. There is absolutely no fee or charges involved.

 

Digit Commands

Actually, you don’t even need to download the app.

When you sign up with Digit you get a text message from Digit.

Save the contact information when you get the text message.

You can manage your Digit account just via text.

COMMANDS – prints the list of supported commands

SAVINGS – Digit Savings Account Balance

CHECKING – Digit will tell you the current balance on your bank checking account

RECENT – most recent transactions that occurred on your checking account

SAVE – manually move money from your checking account to your Digit account. For example “SAVE 5” would move $5 from your checking account to your Digit Savings.

WITHDRAW – withdraw money from your Digit Savings to your bank checking account. For example “WITHDRAW 10” would move $10 from Digit Savings to your checking account.

PAUSE – pause the automatic Digit Savings. You will get text messages back from Digit.

Basically, you Digit Savings account is managed via text messages.

It if perfect for the “texting” generation.

Honestly, I fell in love with the simplicity and convenience of Digit.

Digit does have an app for iPhone and Android.

I have used the Digit iPhone App and raw text messages from my cell phone. Both worked well and I didn’t have any issues.

 

Excellent Way to Build Emergency Funds

According to CNBC“one in three American families don’t have any savings, including 10% of those who earn more than $100,000 a year, according to a survey of 7,845 people by the Pew Charitable Trusts.

A medical emergency or a job loss could push many households to the financial brink. When faced with financial shock, including car bills, home repairs or medical emergencies, 41% said they don’t have enough saved to pay a $2,000 bill.”

If you are struggling to save emergency funds, then Digit  offers an excellent, automated way to save money without having to do anything. Just sign up and save. Honestly, it would be one of the best decisions you have ever made.

 

Save More With Digit

I believe Digit has a use case for almost anyone.

If you live within your means, and are a regular saver, Digit may still be able to save you money based on my observation.

Give it a try – you got nothing to lose.

I belong in this bucket – within a 2 week time frame, Digit has saved me $105.60.

Some of the savings were manual, meaning I used the “SAVE” command a few times to manually save money as I was evaluating Digit.

 

What I don’t like about Digit?

#1 Unable to link from to External Savings Account or Brokerage Account

You can link only one checking account to your Digit Savings.

Today Digit doaes not allow you link your Digit Savings account to external savings account or brokerage account.

What I would love to see is to be able to connect to an external Robo-Advisor accounts like Betterment or Wealthfront.

This way, whenever, I have saved a chunk of money, like for example $500 dollars, I would be able to transfer money directly into my brokerage or an interest bearing savings account rather than withdrawing the money first to my checking account and then transferring it my brokerage or savings account.

I have griped about this to Digit and they said they are looking into it – however, no commitment was made. I am going to be pushing for this feature through the personal finance blogging community.

 

#2 Savings Bonus

On the average daily balance for the past three months, Digit rewards 5 cents for every 100 dollar balance on the account.

Basically, you don’t get any interest. Consider the 5 cents per $100 average daily balance for the past three months a bonus.

 

Stretch A Dime Opinion

If I need to sum up my Digit review in a single sentence, “Saving money couldn’t be easier.”

In my opinion, it is a simple, easy to use, high quality, no nonsense money saving service that is available for free.

Overall, it offers so much benefit that I am willing to work around the two gripes I have.

I am a fan of Digit Savings and plan on continuing to use it.

Wish you Happy Savings with Digit!

 

Have you used Digit? How has your experience been? What other strategies do you use for saving money? If you enjoyed reading this post, please share it on social media.

 

 

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12 thoughts on “Digit Review – Automated Free and Easy Way to Save Money”

    1. Hi Ingrid,

      That is a great question.

      #1 I presume you don’t earn any interest on your checking account.

      #2 You are living within your means and paying your bills off consistently.

      Basically, you have positive cash flow.

      If you just do the above, then your checking account always has a positive balance of some amount on any given day.

      If you go ask your bank what is the average daily balance on your checking account, they will tell you a number. Basically, bank is getting a free ride on your “average daily balance” money.

      Your goal is to have your money saved and invested but not sitting idle in a checking account. Every single dime matters.

      What Digit does is it analyzes the cash flow in your checking account and saves small amounts from your checking account couple of times a week without over drafting your account.

      In other words, what Digit does is save every extra idle dime out of your checking account.

      Digit is the means to an end. Let us just say you saved $200 in two months using Digit. You could withdraw it and invest it or put it into your high yield savings account if you are trying to build up your emergency funds.

      Simple one line answer is “Digit saves money by reducing your average daily balance on your checking account”.

      Let me know if you have any more questions.

      –Michael

  1. Interesting .. I have to say I am not keen on using apps for banking. And, honestly, If I could buy a new car, I would not because of all the technology and the ability of hackers to tap into your information. Negative, right? Just protective. Sounds good, but not for me.. keep sharing your finds!

    1. Welcome back, Lesly!

      From what I have researched and understood, Digit is pretty secure. Here is an extract from their website -“Digit uses state-of-the-art security measures. Your personal information is anonymized, encrypted and securely stored. All funds held within Digit are FDIC insured up to a balance of $250,000.”

      That alleviates my security concerns.

      –Michael

    1. Hi Marquita,

      Welcome to Stretch A Dime! Thank you and I ‘m glad that you enjoyed reading this post and have something to evaluate.

      Hope to see you more here :).

      –Michael

  2. Good review. I’ve only heard of Digit and haven’t used it myself. I use automation to my 401k for my savings needs and have become pretty disciplined over the years to save as much as I can. Doesn’t hurt to learn what options are out there though!

    1. Hi Finance Solver,

      Welcome to Stretch A Dime! Thank you. I am pretty much the same when it comes to automating contribution to 401k and saving consistently on a monthly basis.

      I was on the fence for a while with regards to Digit. Finally, I decided to give it a try. So far, I am very impressed. Every day morning you would get text message notification on your checking account balance and if Digit did any savings for you.

      It keeps me up to date on my checking account without having to login to the bank account.

      Give it a shot, I think you will like it.

      Hope to see more of you here.

      –Michael

  3. I have used Digit for about 4 months now. I just checked my balance and am at $865! Honestly, I thought I was saving all I could, but Digit has shown me I had the room to save even more.

    I would also like to be able to link up the Digit account with other accounts for easy transfers. Hope they do add that feature in the future.

    1. Hi Amanda,

      Welcome to Stretch A Dime!

      That’s awesome. Yes, I had the same feeling that I was saving all I could and Digit proves that there is always room for more savings :).

      Being unable to link to a brokerage account from Digit was one reason made me procrastinate. However, it is just an inconvenience that can be overcome easily. I hope they add the feature soon too. You can Tweet and give them a nudge at @hellodigit (Twitter). I have been periodically pinging them on this.

      –Michael

    1. Hi Full Time Finance,

      Welcome to Stretch A Dime!

      Yes, if your money is sitting idle in your checking account or Digit account, yes, someone else is making money on your cash. I am pretty disciplined about channeling my money into savings and investments. However, there is always some idle money in the checking account given the nature of cash flow cycle.

      Digit identifies it and saves it. Every time I reach $500 in Digit Savings, I plan to withdraw and move it to my brokerage firm.

      Hope to see you more here.

      –Michael

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