As Digit Raises Its Fee, Try These Savings Options Instead
When I reviewed the automated savings app Digit a few months ago, my conclusion was the service was super clever, enjoyable, and effective but that the $2.99 fee was simply too high. Well, unfortunately, that steep price got even steeper recently as the app raised its monthly fee up to $5. The good news is that current users (those who signed up or started a free trial before July 23rd, 2019) will apparently keep paying the $2.99, although the change definitely makes the service a harder sell to new users. So where should wanna-be savers turn instead?
Here are a few automated savings options I think are worth considering:
First of all, Acorns is actually not really a savings app but a micro-investing app. Still, good financial habits are good financial habits, right?
Anyway, if you’re not aware, Acorns utilizes round-ups to automatically set aside money and then invest it in a mix of ETFs. There are five different portfolio options you can choose from, ranging from conservative to aggressive. While all of these will still carry some risk, you can at least pick a portfolio mix that matches your tolerance.
I should note that Acorns also isn’t free, but it’s $1 a month fee seems like a bargain compared to Digit’s new rate. Therefore, if you haven’t given Acorns a try before, now may be the time
To me, Long Game is an underrated personal finance app that doesn’t seem to get a ton of attention. Nevertheless, I’ve been really impressed with how the service literally makes saving money a game.
With Long Game, you’ll be able to set up automatic transfers, choosing from a variety of schedule options. For example, you could choose to have money transferred from your checking account on a certain day of the week, date of the month, or even on your particular payday. Of course, you can also select the amount you’re automatically setting aside each time in addition to making one-time transfers.
Now for the fun part: as you set money aside, you’ll earn coins that can be used to play mini-games. To be clear, these games can only be played using the coins you earn and your actual cash is never being gambled. Not only are these games fun they also give you the chance to win real money. Plus, the more you save, the more coins you’ll earn on a weekly basis. The whole thing is oddly addicting — which, as it turns out, is actually a good thing when the habit your feeding is saving money.
Last but not least, Clarity Money is the most straightforward automated savings option on this list. There are no round-ups or mini-games — but there may be a nice interest rate.
By default (and assuming your linked bank account is eligible), you can set up automated transfers to Clarity Money. Similar to Long Game, these transfers can be weekly or monthly and can customize your preferred days and dates. Like I said, it’s a pretty straightforward process, but it gets the job done.
As for that interest accruing, if you opt-in, you can turn your automated savings account into a Marcus by Goldman Sachs account. The benefit to this is that you’ll earn an impressive APY on your cash (currently 1.30% as of May 12th, 2020). For that reason, this can be a great option that will help make you money instead of costing you.
While none of these automated savings options can’t quite do what Digit does, they may be reasonable alternatives for the price. With Acorns only costing $1 a month and Long Game and Clarity Money being free, I would definitely recommend any (or even all) of them. Whatever you do, just make sure you find a savings solution that works for you — even if it ultimately does include paying Digit $5 a month to help you.
Also published on Medium.