Digit’s Surprise $2.99 Monthly Fee Stuns Users

By Kalyn Wilson

Digit, a once-free automated savings app, now charges users a $2.99 monthly fee.

Consumers are in an uproar this week over the Digit’s new monthly fee. The once-free automated savings app announced Tuesday in a Digit blog post that users will be charged $2.99 a month after a “trial period” of 100 days.

The company said in the announcement that it will increase the “Savings Bonus” — that’s the rate Digit pays to those who store their savings with the app — from 0.2% to 1%, to “reward” users.

The new monthly fee frustrated existing users (who also will have 100 more days of free use and then be charged) so much that Money.com reported the site went down on Tuesday due to increased traffic from complaints and so many customers trying to close close their account. The site was up Wednesday.

Digit CEO Ethan Bloch told Forbes the decision was based on the fact that they needed to monetize the company but didn’t want to sell customer data and advertising that would compromise its brand integrity.

“We went through this huge exercise and a lot of it was in philosophical debates,” Bloch told Forbes.

The app has been free since its launch in 2015. Many customers ranted on social media about the new subscription fee and Digit’s website outage. Some said they planned to abandon the app.

Here’s what you need to know about Digit’s new $2.99 fee and possible alternatives.

Is the app worth the fee?

Considering that no new or enhanced features have been added to the app aside from the increased Savings Bonus, there appears to be no clear benefit from the monthly fee. However, based on the amount of funds you may save due to using this app, some consumers may feel as though the fee is worth the return.

If I decide to leave, how can I cancel the account without getting charged?

For those who signed up for Digit after April 11 — when the changes went into effect — you have a 100-day trial period from your start date before being charged.

If you want to cancel your Digit account without being charged, go to Dashboard > Help > Close My Account within 100 days, as of April 11, 2017.

 

 

 

What are some free alternatives for automated savings?

Other companies offer free automated savings tools, programs, and services to help you reach your savings goals. Here are five options:

  1. Chime offers automatic savings per purchase, plus a weekly bonus reward. This service also offers a “spending” account, a Visa Debit Card and boasts no minimum, overdraft or ATM withdrawal fees.
  2. Qapital allows you to set goals based on “rules” in order to increase your savings potential. For example, the Spend Less Rule encourages you to set a lower budget than what you usually spend in a category, then saves the rest (e.g., if you spend $25 on fast food instead of $35, the app will save the extra $10). The company makes money by accruing interest from your savings and promises there are no fees.
  3. Simple boasts a Safe-to-Spend feature along with its goal-setting and automatic savings feature.
  4. Dobot is similar in its plan for you to establish goals and set aside small amounts toward those goals.
  5. For Bank of America users who prefer the traditional bank atmosphere, you can enroll in the Keep the Change Program. The bank rounds your purchases to the nearest dollar amount and saves the difference. You must have a Bank of America checking account, savings account, and debit card

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