Should you save with Digit?

Personal finance is becoming more automated as the marriage between money and technology continues to develop. It’s becoming easier to let technology handle the heavy lifting, and one app wants to turn Americans’ general indifference toward saving into a positive.

Digit is a relatively new personal finance website that links to your checking account, studies and analyzes your cash flow, and looks for savings opportunities.

It then subtly siphons money from your checking account and deposits it into Digit’s FDIC-insured savings account so you’re less likely to spend the money, helping you save.

Is there a catch?

Two, actually.

First, Digit is free (no hidden fees, transaction costs, etc.), but the money transferred into your Digit account won’t earn any interest. Digit keeps any earned interest. That’s not necessarily a big deal, though. Digit is better for gaining traction with saving and depositing money for short-term goals, not investing for a return.

Second, Digit isn’t like savings apps. You don’t download it from an app store. Instead, you create an account on the Digit website and it communicates with you via text messages. You can also log on to Digit’s mobile-optimized website through your device’s browser, but you can make transactions only through text message.

Although the lack of an app interface can be confusing, the text message system is fairly simple. Digit alerts you when it deposits money. And if you want more money transferred to savings or money to be sent back to your checking account, just respond with a text and the money goes where you want it. You can also set the frequency of text alerts.

Similar apps

Digit reminds me of Acorns and Qapital — 2 apps, made with millennials in mind, that save money in the background. But Acorns and Qapital take a little bit more time to set up at the beginning.

These types of apps can fuel saving for people who struggle with setting money aside, saving a little bit here and there and putting it in a safe little corner without any hassle on the user’s end. In fact, it would take more effort for you to have the money deposited back into your checking account than it takes to deposit it into your Digit savings account.

Is it worth it?

People who struggle with saving: Digit will probably help you. It’s better to set funds aside and earn no interest than to leave it in an account where you’ll end up spending it. Use Digit as a stepping stone toward getting a better handle on your money.

People who have no problem saving: It makes more sense to deposit the funds in a retirement fund, high-yield savings account, certificate of deposit — anything with some return on investment. If anything, Digit may be more of a luxury for you.

Investing is becoming more automated, too. See if a robo-adviser can help you set up a financial game plan.