Digit Review Scam Legit or Necessary?

Digit is an automated savings service. As always, my first question in a Digit review is, Is Digit a Scam? Then, if Digit is legitimate, the question is what exactly this online financial service does and is Digit worth it for the average person’s personal financial situation. Is Digit safe? I checked out some Digit app reviews and then dug into the details myself.

If you are looking for something similar, but that invests the money and doesn’t calculate its own savings (it’s a roundup savings app) check out my Acorns reviews.

Is Digit A Scam?

The burden of proof for calling something a scam differs based on what exactly it does, and what can be shown from available sources. Digit is a venture capital-backed internet start-up, raising money from, among others, Google’s own venture capital arm. That in itself doesn’t mean it is not a scam, but it does mean that it isn’t some fly-by-night hacker operation looking to steal a few credit card numbers and email addresses.

Is Digit Legitimate?

digit automated savings

Since Digit is a legitimate business and not just a scam to steal your banking information, the question becomes whether Digit is necessary. The idea is that if you are not saving as much as you could/should/want to, then could a computer algorithm squeeze more savings out of your monthly cash flow? If so, then Digit is a legitimate service for the harried saver. If you’re already getting every penny, then you are just adding a layer for no reason. This is my review of the Digit automated savings service.

Digit Review

Digit is an automated saving service. If you are familiar with the concept behind the Nest thermometer, then you can consider Digit the Nest of saving.

There are many ways to automate your savings. One of the most popular is the concept of paying yourself first. Deductions that go straight to your 401k plan or automatic transfers to your savings or money market account are examples of this. The trick to this concept is that you have to make some sort of educated guess, from your budget, about just how much to pay yourself before you actually experience the various life events that make up your spending for the month. If you guess wrong for that month and spend more money than expected, you’ll need to ensure that you can transfer some money back (easy from savings, not so easy from your 401k). But what if you spend less than expected? You’ll need to notice and transfer some additional funds to savings.

As is often the case, if you already have a solid grasp on your personal finances and manage your money well, then a new service probably isn’t necessary for you. On the other hand, if you wish you could do better, and might be interested in getting some help, then Digit provides an automated way to increase your savings.

How Digit Works

Most of the press coverage of Digit is using the company-supplied tag line that Digit “finds extra money” and then automatically saves it. Of course, there is no extra money that you didn’t have before, but a computer constantly looking for a dollar or two here or there may just find a few bucks more than you would while managing your finances.

To use Digit, you have to link it to your checking account. You won’t want to link it to a savings account because those accounts are typically restricted to just 6 withdrawals per month, and you don’t want Digit using them up for you.

Once linked, Digit begins to monitor your checking account balance. Over time, it builds up an algorithm that determines when you spend your money, and when you get paid. The idea is that when it sees an opportunity to stash some money away, it transfers it automatically to your Digit account. The company says it checks your account “every 2 or 3 days.” The transfers are typically between $5 and $50.

Here is where it gets a little gray. The Digit website mentions FDIC insurance but doesn’t say exactly where the money is held. It does not appear that you get any statements or interest or anything like that. This is how Digit makes money, they are keeping the interest earned on user’s money while it is in the secret Digit savings account somewhere. When you want your money back, you send a text to Digit and then they transfer the money back into the account they took it out of in the first place.

Digit Stole My Money

There are some people who claim that the Digit app sole my money. In speaking with some of them and with Digit it seems more likely that Digit took too much money at the wrong time. That kind of thing can really put a kink in your finances. If it takes a decent chunk right bfore a big check hits that might leave you saying, “Digit stole my money!”

Is Digit a Good Idea?

The result of our Digit review is that Digit is good, depending on how you manage your money. Whether or not Digit is worth it depends very much on how you currently handle your finances.

For example, I always recommend that people keep a little buffer in their checking account to avoid ever coming up short on an unplanned expense. Digit will eventually drain that buffer away as “extra” money that you could be saving.

For the same reason, Digit is not a good idea for people who primarily use a debit card for their purchases. Digit requires some sort of routine for the algorithm to work. If you normally spend more money in the middle of the month, for example, Digit will account for that. However, if you go out and try and spend $800 on a new bedroom set using your debit card, Digit almost certainly is not prepared for that. Big, unusual expenses are probably going to be Digit’s Achilles heel.

People who get paid monthly will probably find Digit more problematic as well. If you get paid every week, sneaking a fiver out of your checking account probably won’t be noticed because new cash flow is coming soon. But, if Digit pulls $50 out on the 11th, and you don’t get paid until the 30th, then that might be more noticeable.

The best possible people to be using Digit are those that have very set spending patterns and then use a credit card, or debit card from a different account for big purchases. That way, Digit can figure out your spending and won’t ever be blindsided by a big purchase.

In the end, Digit is probably more fun than it is necessary. The fact is, assuming you have extra money each month, the only thing that happens is that it builds up. The premise behind Digit is that unless they took the money first, you would spend it. If that isn’t you, then you can just transfer the money whenever it is convenient for you.

Digit is a very neat concept, but only a small portion of people would actually need it.

39 thoughts on “Digit Review Scam Legit or Necessary?”

  1. I have been using Digit for about a year. It has truly been a blessing to me. It has helped me pay off one credit card and in one month another one will be paid off, thanks to Digit working in the background. I have Digit save money for a credit card payment each month, then, they always have a rainy day savings, which I will use to pay my car registration next month. It works completely in the background and I never miss the money they take out!!

  2. I read a lot of negative comments, but I love this app. Not had any issues after a year, and saves me money that I don’t even miss! I did withdraw a some, just to see what would happened and it was quickly deposited back into my bank account within 24 hrs. So it works for me.

  3. I have been using Digit for 3 months now , haven’t had problems yet ,saved a bunch of money … and I’m one of those paycheck to paycheck people. But what I also realized about myself – I have a spending problem ( even though I don’t have much to work with ).Couple of times it came a little close ,so Digit transferred money back to my account.

  4. Digit is a scam. I signed up for my account, which they blocked my out of, and then proceeded to take my money out of my account. Stay away!

    • Digit is starting to look shady to me. I had an issue about the app saying I’m having connection problems. I asked for help and each time I get the same exactly worded response. I called my bank. They said it’s not them. It’s not my phone settings, it’s Digit not doing their job. Every month I have been connected for them to get their $2.99 but when it needs to save for me there is always a problem. I’m fed up with their diligence and I’m contacting the founder.

  5. I manage my sons account as he is only 15. His Dad id a CFO and did not agree with him using this service. Although he has a very small amount of money we are trying to teach him good money management. All I see on his account are withdrawals from Hello Digit.

    • Not sure what you’re saying there. If he isn’t using his checking account, then Digit is doing what it is supposed to by withdrawing his “unused” money and depositing it into a Digit account. If you are saying that he is withdrawing money from Digit, then that’s a spending issue of your son’s.

  6. The authors review was the most honest i have seen yet. IMO, This APP is the WORST. I have incurred multiple OD fees, the daily notifications of checking balances is always old (today I got a balance from a week ago), you can’t find anywhere to cxd the app, there is no contact info, and I am still waiting to get my “savings” back. I am SUPPOSED to get it on Monday and if I don’t and/or again cannot cxd, I am getting an attorney. This is ridiculous! Oh and now I might be charged to get screwed. Trumpf and now this.

    • I’m having the same exact problem. Only a few times it was on target with my bank. As soon as I asked for help I started having connection issues. They had me cash out and start over to see if that connection error would fix. It didn’t. I feel like because I complained they keep giving me the error and won’t save for me. AND I don’t have connection errors when it’s time to collect their $2.99 monthly subscription fee. Something isn’t correct. I’m going to contact the app founder if there really is one.

  7. The concept is a good one in my opinion but it didn’t work for me. I thought they would review my banking use before withdrawing money but they took money out immediately and continued to take money out – EVEN ON AN OVERDRAWN ACCOUNT! It may work for people that don’t live paycheck to paycheck but it COST me money! I “paused” my account but money continued to be withdrawn! I send proof of the multiple overdrafts but haven’t received any money back. Money was taken out of my account every single day. Worst decision I made. I’m really aggravated.

  8. I love Digit and used to for my vacation savings fund! I also received a payment from digit which seem to be interest on my account I had with them. I would recommend digit to everyone, it is a little addicting watching the money grow and receiving updates about your savings!

    • although im almost 2 years later than this posting, its true i love it. you dont eve realize the money being missing. you can even set an amount that you dont want your account to go lower than. helped me save almost 300 in 1 month and a half 🙂

  9. How can anyone say it’s safe to hand over your bank account’s login and password. That’s just insanely risky. I wouldn’t give my own mom that info.

  10. I’ve been using digit for over a year and have saved quite a lot and never had an issue. I have not had an overdraft has never touched money meant for anything else and always received a quick reply when i need an answer. I’ve only had to removed money once and it went seamlessly. I’ve recommended it to many friends and all of them use it and love it

    • I thought they would review my banking use before withdrawing money but they took money out immediately and continued to take money out – EVEN ON AN OVERDRAWN ACCOUNT! It may work for people that don’t live paycheck to paycheck but it COST me money! Worst decision

      • Loll….
        I’m sorry man. But I live paycheck to paycheck too. But I believe it’s worth some bucks. And for me it’s the way I could save some bucks. Because If i leave it in my saving, I can easily transfer it whenever needed. No matter u leave paycheck u need to save a little change for rainy days.

        • I let them keep the $60.00 they finally took from me, it would be another nightmare trying to recover it. I just look at it as the price I paid for this mistake. They take money out of my account without giving me a heads-up about it. they email my gmail account to tell me my banking activities everyday so google can keep records of this. I changed my banking password just to stop the bleeding. If somehow I see that they managed to withdraw money after this, I’M SUING GOOGLE!!!
          There’s no way that google is not involved in this.

  11. This was hands down the worst decision I’ve made to date in 2016. Immediately caused me to overdraft my account within 3 weeks of using the service and contrary to their promise to refund any fee incurred as a result of using their service — they don’t. Huge waste of time & money – don’t use it or expect to inevitably waste your money on overdraft fees!!!

    • Same thing happened to me! I thought they would review my banking use before withdrawing money but they took money out immediately and continued to take money out – EVEN ON AN OVERDRAWN ACCOUNT! It may work for people that don’t live paycheck to paycheck but it COST me money! Worst decision!

    • You can always PAUSE whenever you think you’ll be over drafted and resume when you want Digit to start saving for you again.

      • When digit works correctly, it’s great. However, digit has misread my balance for over a month and I have had to run to the bank to prevent an overdraft four times. Luckily, I was able to add more funds, but, that may have been devistating for paycheck to paycheck folks. I read the help info and tried to reconnect, which didn’t work. I wrote the company with no response. It’s a great concept – but the company needs to work out the kinks and improve its customer service. I cancelled my account.

          • You can cancel the account but they still keep taking money out. I had to change my banking password and the bank says that I will have to close the account and open a new one. Google has all your banking info on file including passwords.

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