Even though I like to check-in on my savings and investments almost daily (I am just really starting out on this path still, it can be heartbreaking when the market drops, but you’re in this for the long haul, right?)< I like to do as little as possible, and still save.
Enter Digit. Digit is a service that connects to your bank account, and monitors your transactions. Every 2-3 days, it makes a transfer from your account to your Digit account (usually in the $5-50) based upon your spending habits. They never transfer more than you can afford, and even have a no-overdraft guarantee.
They have an app for Android and iOS, but most of the work can be done over texting with their automatic chatbot. Digit will let you know your daily checking account balance, where funds have gone, and allow you to deposit and withdraw at your leisure, with no costs.
So… what is it?
Digit is the perfect place to put money away for savings… for a rainy day, vacation, or, like I do, to use to invest. You won’t make much off Digit as far as returns, which is why I use it as a temporary holding for savings. I wait until the balance is at $250 or above, and then transfer that back into my checking account (the process takes a couple of business days, so it is not right at your fingertips, which is why it’s a great place to store some savings), and then transfer it over to Acorns, or another service I use for investing (more of those to come soon!).
How do they make money? The service is free? Well, basically Digit opens savings accounts, and they work with different banks – you never really know the location. They probably get a kickback from the banks per account or something like that, and since they are dealing with a high volume of money, probably get a pretty sweet interest rate. You get a “Savings Bonus” every 3 months as well… but its nothing to quit your job for (5 cents per $100 in your account). But again, that’s not what this is for… at least in my case. It is a temporary way to stash away funds for investing that I cannot easily touch. It is also FDIC insured up to $250k, just like most of your checking and savings account options as well.
So, check out Digit if you feel so inclined, it is another one of the tools in my financial arsenal. And guess what, you can refer friends and get $5 per friend*.