Digit helps automate saving money

|
Digit helps automate saving money
Team Clark is adamant that we will never write content influenced by or paid for by an advertiser. To support our work, we do make money from some links to companies and deals on our site. Learn more about our guarantee here.
Advertisement

April 2017 update: Digit now charges $2.99 a month after a 100-day free trial period. 

If you can’t seem to get any savings done, there’s a new app that could help you.

Digit is a new free service that basically promises to use artificial intelligence to pluck extra money from your checking account and stash it away in an FDIC-insured savings account.

How Digit works

When you sign up with the service, it will automatically learn your spending patterns so it can know when you have some spare funds. Every 2 or 3 days, Digit will then transfer between $5 and $50 from your checking account to your Digit savings account.

Read more: 13 smart money moves to make in your 20s

But here’s the rub: The savings account Digit gives you will not pay any interest on your money. Digit gets to keep any interest they earn on the money, which is how they fund this free service.

Earning no interest doesn’t matter right now because what we get paid on savings is so low. But as interest rates rise, you’ll have to decide if it’s worth it to you to have your money earning nothing just so you can let technology help you build the savings habit. (Digit does say they’ll have a way for you to earn some interest in the future, but it’s too early to comment on specifics.)

And in case you’re worrying about Digit taking money you can’t really spare, the company believes so much in the artificial intelligence it uses that they will pay any overdraft fees you incur if they’re ever wrong.

Read more: 6 items to eliminate from your spending this week

When it comes time that you want to withdraw some of the money you’ve saved, you just send Digit a text message that says ‘withdraw.’ The service will then send the money back to your checking account by the next business day. You’re allowed unlimited transfers with no minimums and no fees.

Advertisement
Clark Howard About the author:
Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust.
View More Articles
  • Show Comments Hide Comments