Digit vs Acorns: Which Savings App Is Better?

Digit vs Acorns: Which Savings App Is Better?

McKinzie Bean
McKinzie Bean
This post may contain affiliate links, which means I may receive a small commission, at no cost to you, if you make a purchase.

Digit vs Acorns.

Not sure which savings app to get?

In this post, I’ll give you a lowdown on the pros and cons of the two automated savings apps. That way, you can make an intelligent decision on which one to pick: Acorns vs Digit.

Let’s get to it.

Digit vs. Acorns

Do you need help saving money?

Let’s face it. Doing so can be a difficult thing to do.

But what if you can do it without even making a conscious effort?

Guess what! There are apps that let you achieve your savings goals without even noticing.

Two of today’s popular automated savings apps are Digit (download here) and Acorns (download here).

Both apps perform the same set of functions. They transfer small amounts of money, moving it from your bank account to a dedicated savings account.

As a result, you are slowly building your savings even if you’re not making a conscious effort. In fact, you can simply forget about it; these apps will do the work for you.

Over time, those transferred amounts of money can add up.

Without even noticing, you have set aside a considerable amount into your savings fund. Digit and Acorns will do that for you.

But while there are similarities as to its basic functions and overall premise, the difference lies in the methods that these apps use to get there.

So in this post, we will look into these differences and see which one is better. Digit vs Acorns: which one suits you better.

How does Digit work?screen shot from Digit home page as an example in the digit vs acorns reviewAutomating your savings is Digit’s major function. If you’re a non-saver, you can greatly benefit from this app.

But how does it do that?

Digit will look into your spending habits to determine what’s the ideal amount to set aside from your bank account and move it into a dedicated Digit savings fund.

This app will do this completely on its own without any input from you. That’s due to its highly sophisticated algorithms. Digit can pick up on your money practices, following a comprehensive observation of your routine.

So when you want to set aside funds to take an out-of-town trip or money to buy new furniture, this automated savings app will do the work for you.

Kickstart your savings habit with Digit. This automated software will give you the needed push to help you reach your savings goals.

Download the app here.

how does Acorns work?

screen shot from Acorns home page as an example in the digit vs acorns review

If you are having difficulty saving money, get into the habit with Acorns.

Unlike Digit, this app is both a savings and an investing app, working on an automated financial advisor platform.

Acorns can help you save money consistently and without exerting a conscious effort (just like Digit). But it also lets you invest in a diverse portfolio of stocks and bonds using the saved amount.

Using your phone, connect Acorns with your bank account or credit card. This app will track your spending habits while allocating a small amount and putting it into a dedicated savings fund. Acorns calls this process as “Invest Your Spare Change.”

Every time you spend money, Acorns will put money into the dedicated savings fund.

And as the money in your dedicated savings fund grows, Acorns will move a portion of it into an investment account.

In addition, you have the option to ramp up your savings and investing by adding more into your dedicated fund.

The more you spend, the more you save and invest.

This is why Acorns attracts millennials and people who have difficulty setting aside money for savings and investments.

Get the app here.

Digit vs Acorns: On Automating Savings

Let’s look at Digit first.

To use Digit, you will need to link the app with your checking account (not savings account); as an alternative, you may connect the app with your debit card.

You’re probably wondering why not use your savings account for the Digit app.

Generally speaking, you can make withdrawals on a savings account up to six times only in a month. Digit will just use them up.

Once you have the checking account or debit card linked with your Digit app, the latter will start monitoring your spending activities.

When the app sees an opportunity to take cash, it will set aside a certain amount.

Digit will stash away money and putting it into a dedicated savings fun every two or three days. The amounts range from $5 to $50.

On the other hand, Acorns can let you link debit cards and credit cards.

Here’s how it saves money for you.

For instance, you bought lunch for, let’s say, $8.50. So you take out your debit or credit card to pay the cashier for the food.

But instead of charging $8.50 on your bank card, Acorns will charge $9.00. This is its breakdown.

That $8.50 goes to the cashier as payment for your lunch. But the $0.50, that’s the amount that Acorns will hold for savings.

Once all the saved amounts reach five bucks, the money will go to the special Acorns fund for investing.

Now, let’s say you’ve been spending $8.50 for your lunch, for 10 days. Every time you pay this amount to the cashier, Acorns will charge you for nine bucks, which accounts for the food cost and the $0.50 that will go to the dedicated savings fund.

At $0.50 for 10 days, Acorns has stashed five bucks into the dedicated savings fund. The app will automatically move this amount for investing.

Once it’s in your special investment account, Acorns will invest the amounts in a diversified portfolio of stocks and bonds.

This is where the Acorns robo-advisor will come into play. The software will determine which stocks or bonds to invest in.

All that savings and investing activities are automatic, resulting from Acorns’ automated program. There’s no need for you to act. This app will do all the work for you.

Digit vs Acorns: Features and Benefits

Here are some of the cool perks when you use Digit.

When it comes to security, Digit features top-notch measures.

Digit uses state-of-the-art encryption; it’s about the same level of security that the military uses.

With these security measures in place, you can trust Digit to hold your personal information, bank details, and funds securely.

Did you know you can earn savings bonuses when you use Digit for three consecutive months?

You get an annualized savings bonus at a rate of 1 percent. No minimum amounts in your account needed; this bonus is automatic. Digit pays out this savings bonus on a pro-rata basis every three months.

Digit also makes a “no overdraft” guarantee.

An overdraft occurs when you don’t have enough funds in your checking account, resulting from drawing money more than your account contains.

Yes, there may be a tendency of overdraft happening when you link your checking account with Digit. But when that happens, Digit will reimburse any fees up to two times. So you don’t have to worry about incurring these costs.

Did you know the Better Business Bureau gave an A- rating to Digit?

Digit is available for iPhone and Android.

If you need to reach its customer service representatives, you can reach Digit through email. It follows the usual business hours, which is between 9 a.m. and 5 p.m. from Monday through Friday.

Check out these cool features and benefits of Acorns.

Since its introduction in 2014, Acorns has steadily put new features and benefits for its app. Here are some of them.

Acorns has a “round up multiplier” feature that does two things.

First, it rounds up the cost for each purchase to the nearest dollar. Then the app lets you multiply all the amounts that go into your savings and investments.

So if you have a savings of $0.50, you can multiply it and triple your “round up” to get $1.50.

Acorns also features a checking account, which comes with a debit card. If you connect this debit card to your Acorns account, you can use it for your investing activities as well as making regular purchases.

Need help growing your money?

Check out Acorns Grow. It’s Acorns’ resource page that features tutorials and articles that aim to help non-savers becoming savers.

Acorns is a partner of many brands, including Apple, Samsung, Walmart, Macy’s, and Hilton.

Would you like to learn about Acorns’s investment method?

Acorns invests following the Modern Portfolio Theory, which focuses on asset allocation to maximize yields and minimize losses.

Accordingly, it will invest your saved amounts based on your risk tolerance; whether you’re conservative, moderate, or aggressive.

The asset allocation includes large company stocks, emerging market stocks, real estate stocks, corporate bonds, and government bonds.

Digit vs Acorns: How Much Does It Cost?

You can use Digit free for the first 100 days.

But after this free trial period, it charges $2.99 per month.

Whether you avail the free or become a paid user, you can cancel the service at any time.

Nevertheless, Digit will pay an annualized rate of 1 percent as a savings bonus.

On this note, if you choose to get the paid service, aim to earn as much savings as you can since the bonus depends on the amount of your savings.

Using the app for a year will cost you around $36. So focus on earning annualized savings bonuses of more than this amount. That way, you can offset the amounts paid to use Digit’s service.

On the other hand, Acorns charges a dollar a month for accounts under $5,000. Above this threshold amount, Acorns charges 0.25% annually.

That’s around $12 a year to use Acorns’ service compared to Digit’s $36.

In addition, Acorns’ fees are already lower when you take into account the usual transaction and management costs charged to conventional brokerage accounts.

So for a casual investor, Acorns’ fees should not be a cause for concern.

Digit vs Acorns: Pros and Cons

Wondering what are the advantages and disadvantages of Digit and Acorns?

Let’s start with the pros and cons of using Digit.

For non-savers, Digit is a great tool that automates savings. This app requires no special effort on your part to set aside money and make your savings goal happen.

You can reach your savings goals without even noticing it, much less think about it every day. You’ll be pleasantly surprised to see you’ve stashed this amount when you check on the app after a month’s time.

One of the best perks of using Digit is its annualized savings bonus, which you can get if you use the app for three consecutive months.

At its 1 percent rate and paid every three months, Digit’s savings bonus is higher than most rates paid by banks on savings and money market accounts.

On the other hand, Digit charges a monthly fee of $2.99, which easily offsets the annual savings bonus of smaller accounts. At this rate, it’s counterintuitive to pay this amount to save money.

Another disadvantage of using Digit is its limited customer contact. You can only reach them through email.

Check out the pros and cons of Acorns.

Acorns only charges a dollar a month, which is a real bargain if you pit it against Digit’s $2.99 monthly.

Plus, it lets you save money when you spend money. Acorns takes a certain percentage from every purchase you make and put it in the dedicated savings fund.

And you will receive a free checking account, which goes hand in hand with your investment account.

Speaking of investing, you can get started with as little as five bucks. This is perfect for newbie and small-scale investors.

Just like Digit, it’s a great tool to help non-savers become savers; only that in Acorns, there’s an investing feature on top of the automated savings.

On the other hand, here are the cons to Acorns.

If you have a small portfolio, a $12 annual fee to use Acorns’ service take a big chunk of your money.

Another downside to Acorns is its customer service. You can only reach them through email. And their response time is usually one or two days.

Digit vs Acorns: Which Is Better?

If you want to save or invest money, Digit and Acorns offer useful services to help non-savers get started on their savings and investing goals.

While both are great options we think Acorns is better due to it’s affordablity and easy of use.

Other great Money Apps:

money on a desk with the text digit vs acorns

McKinzie Bean
McKinzie is a mom of two, and a personal finance enthusiast. She loves teaching other moms how to save money, make money, and take control of their financial situation. She has started five profitable businesses and in college, she double-majored in Financial Planning and Psychology. You may have seen her in publications like Forbes, The US Chamber of Commerce, Yahoo Finance, Money.com, The Penny Hoarder, & more.

Leave a Comment

Your email address will not be published. Required fields are marked *