It can be tough saving money, but automated savings tool Digit wants to offer an incentive to encourage this behavior. The company today announced the creation of Digit Plus, a program that will reward you with cash for savings held for at least three months.
Digit launched in February and in the nearly six months since then, the company claims it has “collectively saved” a total of $23 million, with its customers saving $1.3 million each week. And now it’s time to increase those amounts.
No enrollment is necessary to take advantage of Digit Plus — you just need to have $20 in Digit for three months to get the reward. The company will scan accounts every week to look for money that’s gone untouched for three months. If it finds any, it’ll deposit a cash bonus. The formula for how much would be paid out hasn’t been disclosed, but Digit provided this example: If you saved $1,000, you’d receive a one-time $0.50 reward.
This may not seem like much, but Digit claims it’s more than what you might have received from traditional banks. When you receive a bonus, it will automatically transfer into your checking account once you’ve reached your goal.
“Our mission is to help people achieve financial health with minimal effort,” said Digit chief executive Ethan Bloch. “A unique approach to rewarding savings was the clear next step for the Digit experience. Digit Plus eliminates the complexities of traditional interest models and instead provides a modern savings options that rewards people for hitting savings goals.”
If you’re not familiar with Digit, it’s not a replacement for your primary bank account. Rather, it’s a supplement. The service connects to your checking account and analyzes your income and spending patterns in order to set aside some funds into an FDIC-insured Digit account. This amount is typically between $2 to $18 each week. All Digit-curated funds can be moved back in one business day.
With Digit Plus, the company is hoping to further motivate its customers to want to save more. But while you are able to manually put money into an account with a higher interest rate, Digit is hoping its option is more appealing because you won’t have to do all the work — it’ll extract the cash automatically and pay you just for saving it. And while Digit’s savings account doesn’t pay you any interest, maybe Digit Plus will make up for it.