Digit vs. Acorns [2021]: What You Need to Know Before You Choose

Both Digit and Acorns can help you automatically save money. But is one app more suited to your financial needs than the other?
Last updated May 13, 2021 | By Ben Walker
Digit vs. Acorns

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Both the Digit and Acorns apps provide multiple ways for you to save money and progress toward your financial goals. But each app is designed differently, so it’s important to compare their features and drawbacks when deciding which to choose.

In this Digit vs. Acorns comparison, you’ll learn about each app’s features and how they both could help you when it comes to your finances. You’ll also learn where they excel and where they differ. This information will help you decide which app would make the most sense for your lifestyle and financial goals.

In this article

Digit vs. Acorns

The best investment apps make it easy to manage your money from nearly any location. Both the Acorns and Digit apps are available on iOS and Android devices, so your finances are easily accessible. In addition, the services both apps provide can help pave the way to simpler money management without heaps of added stress.

The automated features on Digit and Acorns allow you to focus your attention on everyday living while saving you time and money. You’ll typically have to pay a monthly fee for either app, but it’s often a small price to pay when compared to the value you receive.

Both apps share similar features, but you’ll notice Digit tends to emphasize its saving benefits while Acorns focuses on investments. Use the table below to consider the similarities and differences between both apps.

Digit Acorns
Minimum investment No minimum balance required No minimum to open an account, but you must have money in your account to start using it
Management fees $5 monthly subscription $1 to $3 per month if you’re under $1 million invested and free if you’re over; $5 per month for a family account
Account types available Digit savings account, Digit investment account, Digit retirement account (Traditional IRA or Roth IRA) Acorns Invest investment account, Acorns Spend checking account, and Acorns Later retirement account (Traditional IRA, Roth IRA, or SEP IRA)
Features Automatic savings for set goals within specific timeframes, multiple investment portfolio options, retirement contributions, savings bonus, and overdraft coverage Automatic investing with Round Ups, diversified portfolios, automatic retirement contributions, metal debit card, shopping offers, and investment accounts for your kids
Distributions Traditional IRAs require withdrawals starting at age 72 or 70 1/2 if you were 70 1/2 before Jan. 1, 2020; Roth IRAs don’t require withdrawals until after the account holder has died Traditional IRAs require withdrawals starting at age 72 or 70 1/2 if you were 70 1/2 before Jan. 1, 2020; Roth IRAs don’t require withdrawals until after the account holder has died
Taxes Qualified IRA contributions are tax-deductible Qualified IRA contributions are tax-deductible
Best for... Automatic saving Automatic investing
Visit Digit Visit Acorns

How does Digit work?

Digit is a savings and investing app that can automate some of your finances to help you achieve important goals. Whether it’s saving up for a down payment or contributing to an emergency fund, Digit could assist. In fact, you don’t even need to think about how you’ll save for your goals. Simply set a goal of how much money you want to save within a specified time frame and Digit will do the rest.

Once you’ve set up a linked checking account to your Digit account, Digit analyzes your finances, spending habits, and upcoming bills, and it determines how much money it can put into savings on a daily basis. If you have multiple savings goals, Digit will also determine how much to put toward each. You can transfer money back to your account from Digit whenever you want.

The money in your Digit savings account will generate a savings bonus every three months. The annual savings bonus is .10%, so when it’s paid out quarterly it amounts to .025%. For example, $5,000 over three months would net you a bonus of $1.25 ($5,000 x 0.00025 = $1.25). This beats the national APY on traditional savings accounts, which is .05% (as of Jan. 14, 2021).

If you’re interested in other options to potentially grow your wealth, you might also consider investment and retirement options from Digit. You can choose from multiple portfolio options for investing and multiple individual retirement account options for retirement contributions. Each investment portfolio is made up of exchange-traded funds based on your preferred risk tolerance—either conservative, moderate, or aggressive. Access to investment and retirement options are both included in the Digit monthly subscription.

If you need more information, read our Digit review.

Digit Benefits

  • Save the perfect amount every day without having to think about it
  • Try Digit free for 30 days
  • Build your savings without changing your lifestyle
  • Over $1,000,000,000 securely saved

How does Acorns work?

Acorns is an investing app that can automatically invest money for you in multiple ways, including its unique Round Ups feature, recurring contributions, and shopping offers. If you’re looking for a simple and economical way to start saving for retirement or get into investing, Acorns can help you get there. Acorns offers three main products: Acorns Invest account, Acorns Later account, and Acorns Spend account.

The Acorns Invest account is Acorns’ primary investing option. This account helps you automatically invest your spare change into a diversified portfolio. The Acorns Later account is for retirement savings. You can choose between different types of IRAs and portfolios and then set up how you’d like to contribute. Acorns Invest portfolios are made up of ETFs based on your preferred risk tolerance—conservative, moderately conservative, moderate, moderately aggressive, or aggressive.

Acorns Spend is a Federal Deposit Insurance Corp.-insured checking account that comes with a metal debit card and loads of perks. It includes digital banking, direct deposit, mobile check deposit, and access to more than 55,000 fee-free ATMs worldwide. Certain purchases with your debit card can earn up to 10% in bonus investments. This means purchases with your debit card at participating local stores and restaurants will automatically initiate a deposit of up to 10% of the purchase price into your Invest account.

If you need more information, read our Acorns review.

Acorns Benefits

  • Bonus $5 after your first investment
  • No surprise fees
  • Get started for just $1 per month
  • Protected by bank level security

What both savings apps excel at

Financial apps like Digit and Acorns are designed to help you invest and save money. These common goals create a lot of similarities between both apps. Here are a few ways both Digit and Acorns excel:

  • Building overall wealth: Both apps offer investment and retirement savings options, which could help you put aside money for the future. The individual options between the apps might vary, but the end goal of helping you potentially build your wealth is the same.
  • Easy access: You can access the Digit and Acorns apps straight from your compatible device or log into your online account on a computer. With availability on both iPhone and Android devices, it’s easy to keep track of your financial goals whether you’re at home, at work, or on vacation.
  • Low cost: Your savings and investment goals may end up being hundreds or thousands of dollars. Fortunately, Digit and Acorns have low-cost subscription plans. And if you have an account balance of more than $1 million with Acorns, you won’t pay anything for its services.
  • Automatic savings and earnings: After a thorough analysis, Digit automatically pulls money from your existing bank account and puts it toward your savings goals. This takes the guesswork out of budgeting the money you could afford to save every day. With Acorns, you can use Round Ups to automatically round up your daily spending to the next dollar and invest the extra money. This method also takes the thinking out of reaching your financial goals.
  • FDIC insured: Digit savings accounts and Acorns Spend accounts are FDIC insured up to $250,000. This is the same level of insurance you’d find at traditional banks.

4 important differences between Digit and Acorns

The best banking apps typically have many similarities. They’re meant to make you money or help you save money, so it’s natural to see parallels between different apps. However, the differences between apps like Digit and Acorns can highlight their strengths and weaknesses.

Here are a few important differences between Digit and Acorns:

Available features

If you’re going to use a personal finance app to help save money, you want it to have plenty of available features. This is especially true if you’re also paying to use an app, which is the case with both Digit and Acorns accounts.

In many ways, both apps provide the same features. You can choose to invest money in a selection of portfolios and you also have the option to build your retirement savings. Where the two apps differ is with a few of their additional features.

Digit offers a savings account while Acorns offers a checking account. You could use the savings account to automatically save toward specific goals and earn savings bonuses every three months. The Acorns Spend checking account gives you checking account features, including a debit card, and could help you earn bonus investments on everyday shopping. Neither feature is necessarily better than the other, as it depends on your financial goals.

Savings goals

Digit easily edges out Acorns if your primary concern is saving money for specific goals. Digit’s main focus is removing the stress from your savings plans. It accomplishes this by linking your bank account to its savings account and analyzing your financial situation. When it decides the time is right, it will automatically take money from your linked checking account and put it toward savings goals you’ve set.

This may seem like a simple step that most people could do themselves, but how many of us are actually doing it? When you don’t have to think about saving money, it can become much easier to reach your goals.

Acorns doesn’t offer a savings account option or specific ways to reach savings goals, as it focuses more on investing.

Automatic goals

Both Digit and Acorns offer automatic options for saving or investing, but it’s up to you to decide which process makes more sense. Digit’s automatic savings are basically a transfer from one account to another. You aren’t spending anything. Instead, you’re setting money aside for specific purposes, like making a big purchase or going on a trip.

Acorns’ Round Ups feature involves actually spending money. Still, it’s not a lot of money. Every time you use your Acorns Spend debit card or another linked card, Round Ups will round up your purchase to the nearest dollar and put the extra money into your investments.

Which option sounds more suited to you? Would you rather have a net-zero transaction and achieve specific savings goals or spend your “spare change” to grow your investments?

Overall cost

The costs of both apps are fairly minimal when compared to other types of subscription services. With either app, you’d be at a maximum amount of $5 out of pocket each month. However, Acorns has three different subscription options whereas Digit has only one.

Acorns has Lite for $1 per month, Personal for $3 per month, and Family for $5 per month. Each plan offers different services. Digit bundles all its services together and offers one plan for $5 per month. It’s not a huge difference in overall cost, but it’s nice to have the option to go for a less expensive plan with Acorns if you don’t want or need the additional services.

Which savings app should you choose?

The savings app that’s right for you depends on your financial needs. Both the Digit and Acorns apps have areas where they shine, so if your needs align with those areas, it’s easy to determine the app that suits your goals and lifestyle.

For example, Digit places a heavy emphasis on savings goals. You could easily set up multiple goals you want to save for and then use Digit to make it happen. Digit automates the process, which makes it simple to save up for things without having to think about it. Acorns can’t do this, so there’s no real comparison in this aspect.

Instead, Acorns focuses on simple and efficient investment strategies. You choose the type of portfolio you want among Acorns’ options and then you automatically add to your investments whenever you make an eligible purchase. There’s no thinking involved and your investments could start to build over time depending on how much you typically spend and how your portfolio performs. Of course, there is always the risk of losing money any time you invest.

In summary, Digit is an excellent choice for automated savings and additional investment and retirement savings options. If you’re interested in automatic investments, retirement savings, and a checking account, it’s hard to beat Acorns.

FAQs

Can you lose money using Acorns?

Yes, you could lose money with Acorns. Any type of investing is inherently risky, though you have the option to choose how conservative or aggressive your investment portfolio is with Acorns based on your personal risk tolerance. There is never a guarantee that any investments will increase in value though.

Are either Digit or Acorns insured?

Digit and Acorns Spend accounts are FDIC insured up to $250,000. Acorns is also a member of the Securities Investor Protection Corp., which insures investors up to $500,000.

Can you withdraw money from Acorns?

Yes, you can withdraw money from Acorns. Open the Acorns app on your Android or iOS device, select your Acorns Invest or Acorns Later account, and choose the “Withdraw” option. Then enter how much money you want to withdraw and confirm the amount.

You can withdraw funds from your Acorns Later account at any time, but you’ll likely receive a 1099-R form from Acorns for the withdrawal. So before you withdraw from your Acorns Later account, be aware of tax implications for early withdrawals from an IRA before retirement.

Does Digit charge to withdraw?

Digit doesn’t charge to withdraw money from its savings account for standard money transfers. However, you will be charged 99 cents if you want to process an instant withdrawal. Instant withdrawals transfer money in a few minutes or less. Standard transfers may take hours or multiple business days.

If you have money in your investment account that hasn’t been invested yet, you can withdraw it back to your checking account without any fees. If your money is already invested, it’s subject to market fluctuations and the amount can change when you sell your investments. Also, selling investments could have tax implications.

Withdrawing from your retirement account could also have tax implications, including a penalty for an early withdrawal before retirement. However, if you have money in your retirement fund that hasn’t been invested yet, you can withdraw it back to your checking account without any fees.


Bottom line

Learning how to invest money is simplified with apps like Digit and Acorns. They provide simple and straightforward ways to achieve your financial goals, though you may prefer one over the other depending on your needs. Digit is more suited to helping you reach automated savings goals, but you could also use it for investing and retirement. Acorns is a top option for automatic investments using a mobile app and you could also build your retirement savings and access a checking account.

For more financial solutions, consider some of the best brokerage accounts available. Many of these accounts offer customized and personalized investment options to help you reach your goals. In addition, they’ve all been hand-selected by the FinanceBuzz team because of the value they provide.

Whether you decide Digit, Acorns, or another app is right for you, just make sure you choose from the best investment apps. Using the right app could really help you work toward your goals, whether that's saving for a rainy day fund or investing for the future.

Digit Benefits

  • Save the perfect amount every day without having to think about it
  • Try Digit free for 30 days
  • Build your savings without changing your lifestyle
  • Over $1,000,000,000 securely saved

Author Details

Ben Walker Ben Walker is a credit cards and travel writer at FinanceBuzz who loves helping others achieve their travel goals through financially-sound decisions. For nearly a decade, he has been using credit card points and miles for the sole purpose of traveling the world. Ben has been featured in The Washington Post, MSN, Debt.com, and Finder.com.