I recently read an article on Yahoo about Google Ventures investing in a new company called DIGIT. I read more about DIGIT and found out that this is a very interesting startup that saves money by taking away money from your account that DIGIT predicts you will not need. The basic idea is that DIGIT predicts what is your cash flow situation in your checking account and transfers money away from your checking account into a DIGIT savings account managed by DIGIT . The DIGIT accounts are in two FDIC insured banks (the article mentioned Wells Fargo as one and I forgot the other) i.e. upto $250000 of the money is safe. Another thing, you get overdraft protection if DIGIT makes a mistake and overdraws money!
The catch is that for the money saved in DIGIT’s savings account, there is no interest paid. The interest is what funds DIGIT according to the company’s website. They say they may give some of the interest back to the account holders at a later time. As it is, the brick and mortar bank I have my checking accounts in is not paying any interest anyways….so, for me it is not much of a loss at this point.
Why do I like this idea? I like it because most times, I have to be conservative in budgeting money because I do not want to overdraw my accounts for an expense that occurs only in some months. Since I am too busy to really do tight money management to the last dollar, that money usually ends up being spent on something else and not being tracked in my spending plan OR money sits idle without being invested in something that can make me more money. If DIGIT can automatically squirrel away the extra money, it will not only make me a better saver, but maybe I will save enough money to use somewhere else…perhaps a guilt free movie once in a while OR add to my financial independence goal 😉
I have signed up for DIGIT recently…apparently, I have to wait a couple days for DIGIT to find some money in my account. Once it does, I will have more to say about this. Since my checking account is desperately short of money always, if DIGIT works for me, it is a really good way of saving money automatically. I will share my experiences with all who read this blog.
PS: If you want to sign up and try it out, go directly to Digit’s website here at https://digit.co/
If you do sign up at all, please do share your experiences, positive OR negative, via comments on this page. I would love to hear from you on how this works out. As you can tell, I am excited about this 🙂
Link to Yahoo Article: http://finance.yahoo.com/news/29-old-invented-painless-way-170000170.html