Digit and Qapital work in much the same way; they are apps that analyze your spending habits to squirrel away micro amounts of cash you won't even miss in order to help you save better, but there are some substantial differences, so here's how Qapital vs. Digit breaks down.
Since last summer I've been recommending two different “savings apps” to Financial Best Life readers – Digit and Qapital. I like and use them both, but now that both are on a subscription model and wanted to update my readers ASAP.
I take my affiliate relationships very seriously, and you guys LOVE these app recommendations and I would never want you to feel like you're getting “duped,” or “nickel and dimed.”
Qapital vs. Digit – A Breakdown of How Much Each Costs
The reason for this update is that in recent months both saving plaforms have decided to go from free to paid. And, boy, am I TORN about this. These apps are businesses, and they need to make money.
They're also providing a service. By allowing me (the user) to access their technology, I am able to save more money, effortlessly, than I was without the technology. These apps also allowed me to consistently save without feeling it and eliminated a lot of the worry of how to save as a freelance business owner.
And I was one of the first to jump on the automated savings bandwagon. Because I've never been good at saving and I loved the feeling of having all these extra “pockets of cash” laying around. I even wrote this post showing how you could leverage the apps to save that all critical $1,000 money cushion to break the paycheck-to-paycheck cycle.
But here's why I'm still recommending savings apps. (Even though I'm suuuuuuper spoiled and don't like having to pay for something that was previously F-R-E-E)
#1 – Previous reporting from Forbes puts Digit users saving $80-$170 per month. Let's split the baby and say you save the average of these two numbers each month ~$125. That's $1500 per year. (Qapital also reports this as the average amount their users save!) Even a $5/mo ($60 per year) you'll still net $1440 in savings.
#2 – It really comes down to how much you can save on your own, without the help of this technology. If you really struggle, the $3-$5 per month is very much worth having that cushion. If you were previously using Qapital/Digit to “supercharge” your savings and save more on top of your normal contributions, I would save the $60 annually as this is 4% of your total savings, which is a pretty hefty chunk.
More About Digit
What is the app digit?
Digit is an automatic savings app that connects with your primary checking account. When you spend, Digit sneaks away money into a separate savings account so you can save money without “feeling it.” If you're skeptical, let me say that they do work. I used automated savings apps like Digit to save over $1,000 in under 45 days.
Does Digit charge a monthly fee?
Yes. Previously, Digit was free for users. Now after a 100 day trial period, users will have to pay $5.00 per month to continue using the services. (previously it was $2.99 now, as of Q4 2019, it's now $5/mo to use digit).
If the average user saves between $80-$170 per month with Digit (the most I've saved is close to $70 dollars), then $5.00 per month equals about 3% of what you save. This is pretty steep for a money management service, and also a huge bummer when you're used to getting something for free.
Read the full Forbes article about the switch. Their reasoning is noble, and I get it.
How do I withdraw money from Digit?
Even though Digit costs $5 per month for the service, it's worth noting there aren't any fees to transfer your money in and out, and you can withdraw your money at any time. There is no penalty to withdraw your money, and no monthly minimums to maintain in your digit account. Simply log into the app to initiate a transfer from your Digit account into the checking you have linked to the app.
Is Digit safe?
Yes, Digit is very secure and comes with the standard 256-bit encryption most e-commerce and financial platforms use to secure sensitive data like checking/credit account numbers. You've also got the option of adding a layer security by enabling a password via your iOs system.
Where Digit beats Qapital
Digit has more features that make it feel like an app for your total financial picture, such as texting you your checking account balance each morning and letting you know of any big transactions that hit your account.
Compared to Qapital I also feel Digit does a better job of sneaking away little pockets of money I truly didn't miss.
Is Digit worth it?
Many micro-savings apps are now charging for services that many are using with much success. To me, I think it depends on how good or bad you are at saving. If you have trouble consistently saving, these services can really help you put aside a significant stash of money over time. But if you're a strong saver, 3% is pretty steep.
Even though Digit gives out a 1% savings bonus to users, Peter from Listen Money Matters found you'd need to keep a daily checking average of $3600 in your Digit account each month to offset the annual cost of their service.
What is Qapital?
Qapital is similar to Digit – it's an automated savings (or “micro savings” app) like Digit. But Qapital doesn't text you updates about your checking account, and instead, you can set rules based on your spending habits.
Some examples of ways I've used Qapital include:
- You can set up rules for when Qapital is allowed to take money out of your account or you can let them sneak little bits out over time.
- Some of the rules I had set up – The 52 week rule (where they take out $1 per week on week 1, $2 on week 2 etc.) and the round up rule where every one of my purchases gets rounded up to the nearest dollar.
- The “guilty pleasure” rule where you have to “pay yourself” a certain amount if you indulge in takeout (or whatever your poison is – eating out is mine for sure!)
- Monthly, one time saving contributions for short term financial goals. When I was single and actively saving for travel, I'd put away over $100 using Qapital each month, which I'd let sit in there until my next trip when I'd use it as spending money for my travels.
- Qapital came in handy on recent trip to Miami, which was way more expensive than I'd budgeted for and so I was able to dip into my Qapital “travel fund” and cover those expenses in cash.
How does Qapital work?
Download the app and set a savings goal: let's imagine a backpacking trip through Europe, or downpayment on a first home.
Create rules that trigger automatic transfers, such as charging yourself for guilty pleasures, taking the 52 week challenge with a Qapital twist, or rounding-up to the nearest dollar on all of your debit transactions. For example:
Order takeout: $5 toward trip to Spain (guilty pleasure rule)
Morning coffee run: $0.50 toward new GoPro (debit card rounds to nearest dollar) Etc.
What bank is Qapital?
Is Qapital FDIC insured?
Do you have to pay to use Qapital?
How do you get your money from Qapital?
By logging into the app and initiating a transfer from your Qapital account into the checking account you have linked to the app (also known as your “funding account.”) Same as with Digit, there are never any transfer fees or early withdrawal fees or penalties. You also do not have to keep a minimum amount in your savings with Qapital.
Transfers take 1-3 business days, which is pretty standard among financial technologies. (Even Paypal takes between 1-3 business days.)
How Qapital beats Digit
Qapital is the first banking service to fully integrate IFTTT (If This Then That) technology, allowing users to save money just by using their favorite apps. For example: Use #DreamHome on Instagram: $20 toward down payment on house, reach 10,000 steps on Fitbit: $10 toward yoga retreat. By enabling the app to trigger savings on normal activities you not only save more, but enjoy using it.
And I like the idea of people enjoying saving money rather than doing it because they feel they have to.
Even though I write about finance, I still struggle with saving, particularly on a solopreneur's irregular income, so apps like Qapital help make it easy for me to sneak away savings so I can indulge in what I love guilt free.
Ways to Save More Money
I get it, paying for apps can be a bummer. To make Qapital and Digit financially “worth it”, you can find ways to save more money. (And yes, you can make manual contributions into Qapital/Digit too to accelerate your savings rate, just like you would with a regular savings account.)
- Here are 82 of my favorite ways to save money in a year.
- How I saved up a $1,000 rainy day fund in under 45 days.
- Ways to save money depending on the amount of time you have (each takes between 5-20 minutes.)
- My 13 favorite survey and cashback sites to earn extra.
- 61 things to do instead of spending money.
- 17 ways to earn money on your smartphone.
- The 8 money habits with the biggest savings impact.
- Do a DIY bill audit and lower your fixed expenses.
How can I save money for free?
There are a few options on how to save money without the monthly subscription. I've also highlighted a few other “automatic savings apps” options that are cheaper than Qapital and Digit, depending on what you're looking for.
Automatic saving technology with Chime Bank
Chime is a mobile only bank that offers a FREE checking account (they call is a “spending account.” You only pay $2.50 for an out-of-network ATM.
But the SUPER COOL thing about Chime is they have their own automatic saving technology tool you can opt into once you are a customer. Two programs, the “Round Up Program” , which saves the change of your expenditures, and the “Save When I Get Paid”, which automatically sets aside 10% of your paycheck.
The automatic savings feature syncs with the Chime savings account. While the account currently only offers a .01% APR, they'll give you a 10% bonus of the money you set aside (Up to $500 per year.)
By opening an account with Chime bank, you can leverage that sexy automatic saving technology without paying a monthly subscription fee. Plus, you won't have to pay any maintenance, overdraft or foreign transactions fees on the account.
A free, high-yield savings account
I like to recommend CIT Bank offers a free high-yield savings account. It takes $100 to open, but after there are no fees or minimums. Best of all, it offers an interest rate 25x the national average (currently 1.85%). It's not as flashy as FinTech apps, and you may have to work harder to save the money, but it is free and you won't have to pay each month for the pleasure of saving your own money.
Other automatic savings apps
Acorns – Acorns is *technically* an investing technology. It costs $1/month and it “saves the change” from the transactions in your checking account and invests them on your behalf. You can, however, move your money at any time so it's like having an automatic savings app. You have to keep your money in it for a long time to see substantial returns, but if you're just looking to leverage the technology…this is a great, low-cost option.
Qoins – Qoins is a bit different. Same type of automatic saving technology (round ups, determining how much is “safe” to save) but it doesn't go into a savings account. Instead, Qoins will make an extra payment to your lender each month on your behalf. It only charges a $1.99 convenience fee. So, if you're looking to save extra in order to pay off debt, Qoins is a great option.
The Final TL:DR
- Free automatic savings apps may be a thing of the past as technology evolves and the app landscape becomes increasingly competitive.
- Apps highlighted in this post do charge a subscription, but they've been around for a LONG time (in the app/online technology world) so you know that are safe and secure.
- If evaluating a new or emerging automatic savings technology, be sure to look at fees, how your data is stored, and NEVER pay for the ability to transfer your money between accounts. Frankly, that's bullsh*t.
- Paying a subscription for a savings app is a personal choice and ultimately depends on how strong you are at saving money on your own.
- Automatic savings apps can help you save more money than you'd normally save, especially if you live paycheck to paycheck or find yourself wondering where your money went at the end of each month.