How to Leave a Figure for a Free Savings App

Digit is a great tool for finding extra money in your budget and saving it automatically . However, they recently decided to start charging customers a monthly subscription fee of $ 2.99. If the irony of paying money to save money is too much for you, here’s how to move on.

How the figure changes

We were big fans of Digit when they first launched. It’s a savings app that analyzes your spending, income, and upcoming bills to estimate how much money you can afford to save every day or every week. It’s the perfect tool for lazy economists or anyone looking to squeeze more out of their budget. Unfortunately, you now have to pay to use this service. To their credit, it was not an easy decision. Forbes explains why :

The San Francisco-based startup, which has raised $ 36 million from investors including Google Ventures, Ribbit Capital, and General Catalyst, is currently generating no revenue other than meager deposit rates. When Forbes asked last year how the company plans to make money over the long term, the company had no answer. “To be completely honest, we have yet to find out,” Bloch said at the time.

To address this issue, Digit decided to start charging users a monthly fee of $ 2.99, which will take effect immediately for new users. Existing users will be given a 100-day grace period.

New opportunities

So what do you get for your money? Well, they’ve also updated their annual savings bonus from 0.2% to 1%. This bonus is paid every three months, so if your average balance is $ 4,000 over three months, you will receive a $ 10 savings bonus.

Simply put, you get 0.25% profit every three months. As one reader pointed out, this means you have to keep $ 3,600 in your Digit account just to pay the commission. According to Forbes, the average Digit user saves between $ 80 and $ 170 per month.

In an email, I asked Digit if there are any features in the plans that will help users save or earn enough to justify the fee. A rep told me there was “a lot more to come,” and then elaborated on their recent introduction of Goalmojis , a feature that lets you use emojis to tell Digit what things to save on. Want to save on a down payment on your car? Write them a car emoticon. I love emoji as much as other people, but this is not exactly innovation. ¯ \ _ (ツ) _ / ¯

There are online bank accounts (like Ally) that offer the same interest rate with no commission . Therefore, it is unlikely that many people would find the $ 2.99 subscription worth it. Sure, Digit helps you save money, but what’s the point of saving if it costs money? At $ 35 a year, that’s not a huge amount, but it seems like an unnecessary and ironic bill for someone trying to save a little more money. If this is you, you might be wondering how to close your account.

How to close your digital account before being debited

The good news is that Digit makes it relatively easy to get off the ship. Just follow this link and enter your credentials.

If you have money saved in your Digit account, Digit will ask you to transfer it to your bank account, and will do so the next business day, so you have nothing to worry about. They keep your contact information for 90 days after you close your account in case there are any problems. If you change your mind, you can also reactivate your account at this time.

Once closed, you should receive an email and / or text message from Digit confirming that they are closing your account.

Where to go instead

Digit is unique in that it analyzes your actual expenses and bills to determine how much you can save yourself. Other tools are much more practical. So they won’t do the same, but most of them won’t charge you to save you money.

Tilt yourself

Tip Yourself is one of our favorite money saving apps. It’s simple, but it works.

It works like a virtual coin bank. You sign up for an account, link your checking accounts, and then pay yourself any amount of money for whatever reason you like. Did you go to the gym? Charge yourself a dollar. Or maybe you resisted the temptation to spend $ 10 on lunch and brought food from home instead. You can actually save that money in your Tip Yourself account.

I asked app co-founder Mike Lenz if they have plans for an automation similar to Digit. He told me:

We do plan for automation in the future, but we continue to build on our core belief that in order to change your behavior, you need to be actively involved. However, being actively involved does not mean that you have to open the Show Yourself app every time. We always strive to make it as easy as possible to tip ourselves. Our vision for automation in the future is automatic prompts based on some other action. For example, took 10,000 steps, checked into the gym, etc. This is similar to the concept of ” IF THIS IS THAT “, and also a lot in our plans for the future, but not in the near future.

I really like their idea that there should be a little more money with it, but it’s also nice that they have plans to increase their savings through various activities. In the meantime, the best thing about the app is that it’s free. According to their website, “Saving money doesn’t have to come with a fee. This is our position, and we adhere to it. ” It is currently only available for iOS , but an Android version is in development. As with any reputable bank account, the money you deposit into your Self Advice account is FDIC insured.

Qapital

I have been using Qapital for over a year now, and in fact I have been using it much more than Digit.

However, Qapital is a little more complex than Tip Yourself. It uses automation, but you create your own save rules. For example, you can create a rule to keep a certain percentage of each salary. Or, you can create a rule to save money every time you spend money at a specific store. You can even create a “save changes” rule.

Qapital will save money on your account and you can even tag it for a specific purpose like taxes, honeymoon, or a new car. You can also link it to If This Then That (IFTTT ) to create even more rules. For example, you can use IFTTT to connect Qapital and Instagram and then create a rule to save money every time you post a photo. Or, you can hook up Qapital to a weather app and then create a rule that literally saves money for a rainy day.

Qapital is completely free to use ( it makes money by charging interest on customers’ savings, just like a bank does) and is available on iPhone and Android . They are also FDIC insured.

Acorns

Acorns is not just a money saving app, it is an app that automatically saves you money and invests it. It rounds off your purchases to the nearest dollar and then saves the money to an account that invests in ETFs in ETFs .

However, there are a few caveats here. First, Acorns is not a retirement account. This is a taxable investment account, which means you have to pay taxes on your income if you withdraw money from your Acorns account. (Most personal finance experts recommend putting money into a tax- free retirement account before investing in a regular investment account .)

Secondly, Acorns is not completely free, but their fees are still better than Digit’s. For accounts with balances less than $ 5,000, there is a flat monthly fee of $ 1. For accounts exceeding this amount, the commission is reduced to 0.25% per year.

There is also an “annual deduction of 0.25 to 0.5% of the total investment.” This is because ETFs have their own set of fees, called expense ratios, and that amount is deducted from the money you make from your investment (but you pay it off even if you open an IRA with a brokerage firm like Vanguard. or loyalty).

While Acorns isn’t free either, it’s still better than Digit. Not only is the actual commission much cheaper, you are also actually investing your own money, so chances are you will get more income in the long run.

It’s a shame Digit are no longer free because they are a great saving tool. However, the tool’s business model now seems to conflict with what most of us use it for: to find small opportunities to save money.

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