Tag: Tip Yourself
In September 2016, I wrote a review on Digit money saving app based on my personal experience. Last week, I decided to close my Digit account. Are you wondering why? Before I elaborate, let me provide you a sneak peak review of what Digit is.
First of all, Digit is an excellent service that helps you save money. It provides an automated and easy way to save money without ever having to think about it.
It took me less than two minutes to sign up and get my checking account connected to Digit and I started saving money.
Digit uses a proprietary algorithm to study the cash flow patterns in your checking account. It saves small amount of money anywhere between ~$5 and ~$50 from your checking account to your Digit account about 2 to 3 times per week.
Withdrawing money is super easy as well. You can ready my Digit Review for further details on how it works.
Digit Monthly Service Fee
If you recall, the Digit app was a FREE service. However, last week I received an email stating that Digit is going to charging $2.99 per month for their service.
The service is great, however, it is going to cost about ~$36 per year. Is this worth it?
Let us think about it for a minute.
Digit provides 0.25% interest on the balance on your account over a 90 day period.
To keep the math very simple, I am just going to say that you earn about 1% of your total balance over a full calendar year from Digit.
If you had $3600 sitting in your Digit account, you would earn about $36 in interest.
That would cover the service fee for the whole year.
When I looked at it, it made no sense to me at all. In essence, I am giving Digit an interest free loan.
If I took the same money and put it in a one year CD, I could earn at least 1.25%.
The point is, if you are living within your means, and a saver, it does not make any bit of sense to use Digit to save money.
The logic was loud and clear in my head and it was simple decision. I closed my Digit account last week.
You can follow this link to close your account.
Who Might Benefit?
If you don’t live within your means no app or service is going to be of any help. If you live within your means, however, you are struggling to save consistently, then Digit can help you save money.
If you don’t have any money saved up as emergency funds, you might consider using the service so that you can build your rainy day funds.
Other than, personally, I don’t see the use case for anyone who is a good habitual saver.
Okay, you have closed your Digit account. Now what? Is there an alternative?
You go to restaurant, you tip the server. You go to the bar, you to tip the bartender. Do you Tip Yourself when you do something good?
Tip Yourself is an app that allows you to link your checking account to the Tip Yourself App. You can transfer small amounts of money from your checking account to your Tip Yourself account.
The service is free and your “Tip Yourself Jar Fund” is held in Wintrust bank (partner of Tip Yourself) that is FDIC insured.
You can tip yourself as often as you want and withdraw funds as often as you choose to.
There are no fees for any deposits or withdrawals. The service is free as well.
If you are transitioning from Digit to Tip Yourself, the key thing to keep in mind is that there is no automatic savings.
Saving money is manual and you are in the driver seat.
Tip Yourself – Things to Know
Service is free. Money is transferred from and to your checking account using ACH transfers and it could take ~3 days for transfers to complete.
The Tip Yourself app is available only for iOS at this time. They are still working on their Andriod app which is expected to come out later in the year.
You can transfer as little as $1 or as much as $250 per tip.
Your money does not earn any interest since it is meant to be a temporary holding.
If you had signed up with Digit and now are closing your account for the same reasons I did, then consider Tip Yourself.
I wanted to provide you an alternative that might work. As of now, I have not personally tried Tip Yourself just yet.
If you are using Digit, are you going to continue using Digit despite the $2.99 monthly service fee? If so, why? How do you like Tip Yourself as an alternative?