How are Rize and Digit different?
September 18th, 2017
Saving successfully is all about consistency. That’s why automating the process of putting money aside for the future can be the key to helping you save more than you spend.
Let’s talk about the two platforms that do this well: Rize and Digit.
Rize is an automatic online savings account that focuses on helping you save for goals that matter, whether that’s traveling, paying off debt, building an Emergency Fund, or simply buying that thing you really wanted guilt-free. Digit is an app that automatically pulls money from your checking account when its algorithms determine that you can afford it.
While both Rize and Digit help you put your savings on autopilot, they're built upon two very different philosophies on how to save, and those different philosophies result in very different products. Depending on which philosophy you prefer, you’ll probably find that one or the other is a better fit for you.
Having control vs. giving up control
The core differences between Rize and Digit ultimately come down to control.
With Rize, you are always in control of your saving. You choose the goals that matter to you, how much you want to save each month, and your monthly saving schedule. You always know what’s happening with your money and when.
By contrast, Digit is all about giving up control. Digit’s algorithms determine how much you save and when, and it moves money from your checking account on a schedule it chooses. By design, Digit removes as many decisions as possible from the saving process.
Which philosophy of saving is better?
The best answer to this question is really, “Whichever one works best for you.” Saving successfully is all about finding a system that you can stick with and that helps you make saving a habit for life.
Rize was built specifically with habits in mind, and there is plenty of evidence from the fields of psychology and behavioral economics that making a commitment to save a specific amount each month (even if that starting amount is small) is smart. Putting your money towards a specific goal and automating that process is more effective for building a saving habit. The average Rize customer saves $190 per month, while Digit reports that their average customer saves between $80 and $170 per month, and the savings philosophies of the two products may partially account for that difference.
That being said, for some people, Digit’s approach of taking full control of saving may actually be more effective if it allows them to stick with it. It’s really a matter of preference.
What else is different between Rize and Digit?
In addition to philosophical differences about how best to save, there are a bunch of other differences between Rize and Digit that may impact your decision of which one is a better fit for you:
Digit started out as a free app, but as of July 2017, it now charges a mandatory fee of $2.99 per month ($35.88 annual fee), which has led to a bit of a backlash from customers who were used to paying nothing. To offset those complaints, Digit currently offers 100 days free, and then they start charging the monthly fee.
Rize runs on a “Pay what you want” model, meaning you can pay $3, $5, $0…you choose! In our view, allowing our customers to tell us how much they value our service is the ultimate commitment to trust and transparency. There are no additional fees of any kind and you can make an unlimited number of deposits, withdrawals, and goals for free. We trust that if we make your life better, then you’ll be willing to contribute a bit back so we can keep making Rize better too!
With Digit, you unfortunately don’t earn interest. Instead you get a “bonus.” The savings bonus is 1% annually, so every three months you get 0.25% bonus on your savings, as opposed to normal interest that you would get every month. There are also a bunch of conditions you have to meet in order to actually get your bonus, and Digit caps your bonus at $600 per year. All in all, it’s pretty complicated.
Rize provides normal interest, currently at 0.91% APY, which is more than 15x the national average of 0.06%! Interest is compounded monthly, so you’ll get a nice little reward for the savings in your Rize account each month without fail. By the way, why is the interest rate for savings accounts at most banks so low? Because they’re keeping it for themselves! At Rize, we believe that interest should go to you, not us.
Rize is entirely built around savings goals. You choose what goals you want to save for, and you make your savings decisions on a goal-by-goal basis. In our experience, it’s more effective to give your savings a specific purpose than to lump it altogether in a general pool of savings.
Digit has recently added some goal functionality, but it isn’t ingrained in their DNA in the same way it is with Rize.
Ways to save
Digit gives you one option for saving: letting their savings algorithm take control. Here is a description of the process from Macworld’s review: "Digit’s money saving algorithm is curious. I usually keep between $400 and $1,400 dollars in the account linked to Digit. When I first started using the app, it literally pulled pennies from my account. 17 cents, 22 cents, and 13 cents for the first three transactions. To boost my savings a bit I texted “Save” to Digit with a dollar amount, and it added that much more to my Digit savings account. About two months in, Digit began to save whole dollar amounts, then Digit began making regular withdrawals of between $10 and $20 two to three times a week, draining my linked checking account balance to under $100. $50-plus dollars a week was more aggressive than I was comfortable with."
With Rize, you choose how much you want to save each month and the schedule for those savings (we encourage you to schedule your savings right after each paycheck so you save before you spend, but you can choose any schedule you want). Rize also has saving Power Ups that help you save more and reach your goals faster. We just launched the first two Power Ups called Accelerate, which automatically increases your savings by 1% each month, and Boost, which monitors your checking account and pulls out a bit of spare change when it looks like you can afford it (Boost is a little more similar to Digit’s approach, but it’s intended to give you a little something extra on top of your monthly scheduled savings, instead of being the primary way you save).
Both Rize and Digit also allow you to save manually. In other words, you can deposit and withdraw money from your account on a manual basis anytime you want, as often as you want.
Conclusion: Which one should I choose?
It truly depends on what you’re looking for. It’s more difficult to save money towards a larger goal with Digit, such as buying a home or retirement. Digit is focused on helping you save small and affordable bits of money each week without thinking about it. Rize is really focused on getting you to your goals faster–large or small–and allowing you to have control over the automation.
The bottom line is: If you want control, transparency and customization at your fingertips, then Rize is the account for you. If you’re comfortable giving up control and want an option where you don’t have to think about your savings at all, then Digit may be a great fit.
Either way, both Digit and Rize will help you automate your savings, and anything that helps you consistently save for the future is a step in the right direction.
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