Digit: The Online Piggy Bank That Could Help You Start Saving (A Review)

Saving money, especially with a mediocre salary, is very difficult for most people.

  • A family member got sick? There go the savings.
  • Want to go on a vacation? Bye bye, money.

In the United States of America, the average retirement account balance is $3,000 for working-age households which is barely enough to survive even a few months in a major city.

According to data from the Federal Reserve, approximately half of Americans do not have savings for their retirement. In another survey, 68 percent of Americans said they are spending less money as compared to what they actually make. That means that almost one-third of the working population of the country is not saving any money at all, not even a dime.

Saving money has been so hard that banks have already created automatic deductions from your accounts to force you to transfer funds into your existing savings account every month.

Digit: The Online Piggy Bank That Could Help You Start Saving (A Review)

One of the founders of Digit, Ethan Bloch, says that this fact is unacceptable. He thought of establishing Digit, a startup aimed to help people save money without actually having to think about it.

Digit works as a digital piggy bank, it connects to a checking account of a user, analyzes the spending habits and income history of the user, and uses an algorithm to set aside small amounts of money automatically —usually ranging between $1 and $150—at certain times when the user will least likely miss it.


In an interview with J. Money, a blogger, Bloch says that Digit looks at your linked account balance once every few days and takes into account a series of factors, such as:

  • Whether you have a high or low balance based on how you make and spend money
  • Do you have any bills coming due in the next several days?
  • Will you have any income in the next several days?
  • How much money did you spend yesterday?
  • How much did you spend over the previous several days?
  • How much have you saved so far this month?

While explaining the goal of the service, Bloch says: “After answering questions like these, Digit then tries to arrive at a small amount of money it knows you don't need but more importantly might not feel is missing based on recent spending and income.”

He added: “It can find an amount that won’t put you in a bad place, and it blends in with your traditional spending, so you won’t even feel the money's missing.”

Digit aims to change the way users think about saving money by helping them save without actually having to think about it at all. Digit was founded by Bloch, Todd Larsen, Michael Murray, and Chris Wilson in 2013 and is based in San Francisco.

The Advantages of Using Digit

The concept behind Digit is actually really simple: A user creates an account, gives Digit access to his or her online banking account credentials, and over time, the company transfers some funds from the checking account and into a Digit savings account that is non-interest-bearing but FDIC-insured.

save piggy bank

The service does so seamlessly, without the need to ask you how much you wish it to transfer beforehand. It takes a number of factors into account by analyzing the spending patterns of your checking account, then Digit determines the time and the amount to pull out of your bank account to transfer to your Digit account.

And Digit does so only when you can actually afford it, so you do not have to worry if there is a day when you spend a little too much at the bar or buy an expensive purse — Digit will already know when not to touch your account.

How it Works

First and foremost, Digit will look at the amount of money that you currently have in your account to determine if it is safe to transfer money out of it. Then, among other things, it also takes your regular salary or payment schedule into account and how far away you are from your next payday. It also looks at your daily spending habits to determine how much it can transfer without you noticing it or feeling some sort of financial pain.

It is somehow similar to other personal finance management apps such as Mint.com that informs you regarding your spending habits but takes care of putting some of your money away, too.

Setting an account with Digit is very simple. You register, link your accounts and then sign up for text messaging. They will text you your balances on your checking and Digit accounts every day. If you do not like that, you can request it to stop from doing so.

website man browsing internet

Digit sends you weekly updates regarding your savings via text messages, you can also ask it to transfer some money back to your checking account whenever you really need it by sending a message to the number of Digit. Using text messages means that Digit is taking advantage of one of existing smartphone habits of young people.

Digit’s website shows details regarding the Digit account of a user including the amount of money that is currently in the account, the amount that has been saved over time, the average transfer amount, and how often a withdrawal is done. The site also shows the user a detailed list of each transfer done over time that the user can scroll through.

Instead of overwhelming its users with information displayed on its website, the primary mode of communication of Digit with its users is via text messages. It sends its users daily updates via SMS with various pieces of information every day. It usually informs its users with the balance of their checking account and how much they have saved with Digit over the course of a week or a month.

checking phone woman

Users can request more data using simple SMS commands. For example:

  • Users can type ‘Recent’ and Digit will text the users back with the last three transactions that were recorded by their checking account.
  • When the user types ‘Withdraw,’ the users can transfer money back from their Digit accounts to their checking accounts at any time.

It also does not overburden the user with too much information or depend on them to change their behavior to benefit their financial interests. Another interesting quirk regarding Digit is that it does not have a website or a mobile app that displays detailed statistics regarding the spending habits of the user, where the money went, or how the user could better plan his or her budget for the future.

Digit keeps the interest earned by its users while storing their money at partner commercial banks of Digit, such as Wells Fargo. The accounts of the users are insured by the FDIC for a maximum of $250,000.

Digit also has a “no overdraft” guarantee so if they overdraw your account accidentally, they will pay the fees you have incurred.

save money bank

As for the safety and security of the services of Digit, they make use of bank-level security to keep the information of their users protected and encrypted. Bloch said that they do not store the bank login and password of users, and while they do store the account numbers of their users, they make use of asymmetric cryptography to keep your information safe. You can read more about their privacy policy on their website.

The Disadvantages of Using Digit

There are some disadvantages to using the services of Digit that users should know. Unlike normal savings account, the money that is transferred into Digit “savings accounts” does not bear any interest.

Critics say the users of Digit would be better off with just placing aside their money by themselves into their own savings account. Other people say they should place their money into bonds and stocks or anything that has a better financial return.

But these people are actually missing the point of why Digit exists. Digit exists because the majority of people across the globe are not good at saving money and would not do so on their own.

Digit puts money aside so that they do not have to do it by themselves, and does so in a way that needs very little foresight.


Over the years we have seen the rise of personal finance applications, the majority of which aims to help users better understand their finances, make positive decisions with their money, and manage their budget. Digit is a very helpful tool that will help you do just that.

phone money saving cash

Digit serves as yet another dead-simple tool that is suitable for people who does not have the know-how or the willpower to properly maintain savings for the future.

With the use of Digit and a lot of discipline on not opting to transfer some money back to your checking account, you will be able to save some money that you can use in the future.

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