You know you should be saving consistently, but you just can’t seem to remember to do it. Automating your finances, meaning, you set up your funds to be moved from your checking to savings account each month, can help you save without thinking about it. Two new savings apps — Digit and Acorns — have launched recently to help you save automatically. I took a look at how each of them work and whether or not they’re any better than automated transfers to an online savings account at your bank.

When you make a purchase, the amount is rounded up to the nearest dollar. The difference is transferred from your checking account to Acorns.

How does the Digit app work?

Digit works by looking at your cashflow to decide if it can transfer some of your money into an FDIC-insured Digit deposit account. Your money does not earn interest because Digit collects the interest as its “fee.” So, Digit merely focuses on helping you stash away your money. You link Digit to your checking account and it will see if you can afford to move some money (typically $5 to $50) into the Digit account every 2 to 3 days.

Digit also lets you manually transfer money into savings.

What does the Acorns app do?

Acorns helps you save by rounding up your purchases to the nearest dollar and automatically invests that difference into a diversified stock portfolio. You connect your spending accounts to Acorns and then provide a funding account for the transfers. Once your round-ups reach a total of $5, it is transferred to your Acorns account for investing. (Bank of America customers may notice the resemblance of the Acorns to the “Keep the Change” savings program.)

Acorns app helps you invest your savings.

Automated savings transfers vs. Digit and Acorns

Digit and Acorns are great ways for young folks to start saving because they siphon a little money here and there. The intended result is that you use one of these savings apps for a while — without actually thinking about it — and end up with sizable savings that you would not have built up on your own.

While I am an advocate of using technology, like savings apps to help save you more money, I still prefer to automate my finances without the help of an app. I schedule recurring fund transfers for the day after every pay period — money goes from my Chase checking account into my Ally Bank money market account before I really have a chance to realize it was there. Big banks, like Chase, call it a repeating transfer series, and will allow you to link to your non-Chase savings account, or “external account” — in my case it’s my Ally Bank account.

Tip: You can do the same. Start with smaller transfers of $5 and slowly increase it as you see fit.

I suggest making those automated transfers into an online savings account. I’ve always been a major proponent of online savings accounts for their high savings rates. Right now, popular online banks like Ally Bank, Synchrony Bank and CIT Bank offering great savings rates of around 1.00% APY. With automated transfers to such savings accounts, you don’t have to deal with fees (Acorns charges fees) while your savings earn interest.

One thing that sometimes worries me with these financial apps is that I have to provide sensitive account information so that they can track my finances when helping me save. How secure are they? Can I trust them with my account information? I prefer to not worry about that all the time.

However, if you want another way to save a little here and there, it can work to your advantage to use a savings app like Digit or Acorns. Let’s take a better look at how they could also help you save:

Digit vs. Acorns: Which helps you save more?

When it comes to building a decent savings balance, I think Digit will do a better job than Acorns. (Digit is currently still in its beta stages, which means it’s not available to the public yet, and no word yet on when it will be available.)

I like that both Digit and Acorns are trying to help people stash away money automatically. You’re less likely to notice that the money was missing. However, they take different approaches to this concept.

With Digit, you’ll save money only when Digit feels it is safe to pull money from your checking account, because you’re not spending that money. With Acorns, you’ll save money only if you’re spending — that is, making multiple purchases.

The issue with Acorns is how long it will take for someone to accumulate significant savings through these round-ups. Based on data from a 2014 Federal Reserve study, the average American makes 19 debit and credit card transactions per month. Let’s assume that if every one of those 19 transactions had a purchase amount with one penny over the dollar (e.g., $3.01) with a 99-cent round-up, the average American would save just $18.81 per month with Acorns.

There is no way for me to provide a good number on what Digit might save for you in an average month, but I’d expect Digit to push for more monthly savings than $18.81.

Growth potential of your automated savings

Whether your money is put in savings or investments, it is usually wise to allow your money to grow — often in the form of interest earnings or capital gains. In this respect, Acorns beats Digit.

The Digit account doesn’t pay any interest, so your money is just going to sit there doing nothing. I think it does a great job of simply getting people to set aside money, but it doesn’t really offer much else in terms of savings growth.

On the other hand, with an Acorns account, your money is invested in a diversified portfolio of six funds that were selected based on your risk tolerance.

Being a big believer in diversified investing, I like how Acorns slowly introduces people to the concept. Yes, it is possible to lose money when the stock market drops, but there’s also plenty of upside. As the balance in a user’s Acorns account becomes larger, it will encourage that person to learn more about investing before taking a more hands-on approach to investing (like moving their money to a brokerage and picking funds).

Consider the fees involved

You’re trying to save money here. I think it would be rather counterintuitive if you’re paying to save. So, you should be aware of any fees involved with either of these two tools.

Digit has no recurring fee of any kind. The company stands behind its math so that you don’t have to worry about Digit overdrafting your checking account to perform a transfer. Digit promises to pay the overdraft fee if it ever overdraws your account.

With Acorns, you pay a $1 monthly fee when your balance is under $5,000 or a 0.25 percent annual fee when your balance is $5,000 or more. In the grand scheme of things, $1 per month or 0.25 percent may not seem like much. However, considering how many round-ups you’d need to transfer, the fee can feel pricey — if your monthly round-ups add up to (let’s say) $10, the $1 fee means you’re forking up 10 percent!

Final thoughts

In looking at both of the apps’ fees, Digit is free with no real way for the savings to grow on its own. Acorns has a fee for the potential savings growth through investments.

If you’re not willing to pay fees for using an app, opening an online savings account and scheduling fund transfers is the way to go.

How do you make yourself save on a regular basis? I’d love to hear your methods in the comments!

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