Back in March of this year, I heard about Digit and signed up for it. For those of you who are new to Digit, it squirrels away money from a savings or checking account. It analyzes your account balance, spending, upcoming income, and upcoming bills to figure out how much it can safely move.
Digit Saved me Over $100 in One Week and I just set it up and (mostly) forgot about it.
Here’s what the account looks like now:
That’s not a bad little emergency fund, right? My Digit account actually has even more money in it. If you sign up through this referral link you can actually earn $5 by referring other people. I’ve collected quite a few of those $5 bonuses. It almost sells itself. No one is against saving money the easy way.
The other day it occurred to me that Digit could be a new kind of Christmas Club. If you aren’t familiar with Christmas Clubs, I won’t hold it against you. I think they were a little before my time. Here’s how Wikipedia describes them:
“The Christmas club is a savings program that was first offered by various banks in the United States during the Great Depression. The concept is that bank customers deposit a set amount of money each week into a special savings account, and receive the money back at the end of the year for Christmas shopping.”
I don’t know how much money you are you going to spend this Christmas, but I read the average is around $880. I’m sure everyone’s Digit savings are going to vary over time, but mine seem to be around $200 a month. That means in about 4.5 months, I’d have enough savings to fund the average Christmas budget. What I like most about this is that you set it up once and you never need to do anything. For the most part, I don’t notice what’s in my Digit account unless I’m writing an article like this one.
So my recommendation is to sign up for Digit now so you’ll be prepared for next Christmas. You might even be able to snag some free money yourself by referring friends and family.
I just signed up for Digit and it seems a little sketchy to me. They have access to my checking account now, and they did not require my social security number or address to set up the savings account, which makes me question whether the money is actually in my name or not. We are basically allowing someone to sweep our checking account of funds and put them into an account that we may or may not keep access to. Too risky for me; seems like a good idea, but I think they skipped some security and bookkeeping steps for the sake of ease of signup.
Money in your Digit account is FDIC insured so you should be good for up to $250,000 and Google Ventures is one of the funders. I haven’t found anything sketchy about them in the 9 months I’ve been using it.
I understand it’s insured, but insured to who is my question. All they have is your name and email address. How would you go about making a claim if one of the banks failed? Only your name is on file and that could be claimed by anyone? I’m not trying to stir up trouble and the banks they use are large and will probably never go out of business, but the lack of paper trail and controls is concerning. I don’t see what would stop the business owners from just transferring all of the money out of everyone’s account if they wanted to, or using the funds as a ponzi scheme to pay business operations hoping everyone doesn’t try to withdraw their money at once. There’s no piece of paper that says the account is yours. Just food for thought. I enjoy the blog, keep up the good work.
It’s been a long time since I signed up. Maybe the other bank they transfer from is a link. It’s not like the money is coming out thin air.