Saving for the future is difficult, especially when the instant gratification of spending constantly calls out to us. The dopamine surge we experience when we spend isn’t the only obstacle to saving anymore either. Routinely setting money aside has become harder than ever for many due to hardships spurred by the COVID-19 pandemic of 2020.
According to a recent survey, 63% of Americans are living paycheck to paycheck as we continue to navigate the pitfalls of a pandemic economy. When there’s little wiggle room in a monthly budget, a traditional savings plan can feel like an impossible endeavor.
But worry not a healthy, growing savings account isn’t completely out of reach for those of us with a thinly stretched budget. The trend in microsavings, autosavings, and round-up financial technology apps make growing a nest egg more attainable for everyone. By changing our saving habits without drastically altering our behavior, savers can easily tuck away funds for future use without a second thought. Here’s a breakdown of the best round-up, automated savings, and microsavings apps, so you can select the best platform and method for your savings goals.
Chime goes far beyond the benefits of a simple savings app. It is a financial technology company whose mission is to provide monetary services that are “helpful, easy, and free”. In addition to its award-winning financial app, Chime also offers a Spending Account, a Credit Builder Account, and a Savings Account. Each type of account includes automated savings features to empower small savers. The moment you open an account with Chime, you’re already saving thanks to their no monthly fee and no-minimum policies.
Once your account is set up, you’ll have the option to open a round-up savings feature, which instantly transfers change up to the dollar into a designated savings account after every purchase. You’ll have instant access to these savings if an emergency arises and you need to access your cash. If hard times cause your account to be overdrawn, Chime extends mercy to its users with a no-fee overdraft policy.
Chime makes it possible for you to save the moment a payment hits your account by using the automated paycheck savings system, which transfers a designated portion of your paycheck into the savings account. With your Chime savings account steadily increasing over time, you’ll also benefit from earning interest on the funds you have saved at a rate much higher than the national average for savings account APY.
Chime Disclosure - Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC.
1Chime cannot guarantee when files are sent by the IRS and funds can be made available.
^Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
For savers who are more visually motivated, the Digit app organizes your unique savings goals into an appealing design layout. Whether you’re setting aside money for college tuition, a vacation getaway, or a 3-month financial cushion, Digit allows users to define what personal financial wellness means to them and track their progress toward each objective.
Saving is hard, but Digit helps make it a little easier by providing monetary incentives to consistent savers. After three consecutive months of savings, a bonus equal to 0.10% annual savings is automatically deposited into your Digit account. Keep in mind, this savings tool charges users $5 per month to operate, so aim to put aside at least more than the app costs.
Digit stands out among the autosavings applications because of its specialized savings algorithm. For the user who truly wants a hands-off approach to passive saving, this can be an ideal platform. Digit accounts for your spending habits, bills, account balance, and predicted income to determine how much money to transfer to savings. The amount will likely change every month, but savers can rest assured that Digit is designed to prevent overdraft.
Acorns takes the concept of autosaving and adapts it for automated investing. For a flat rate of $3 or $5 per month, you have the potential to earn more from your spare change through investment strategies than compared to the small return you’ll get from a savings account APY. Of course, it’s important to note that there’s inherent risk in any stock market deal.
However, Acorns aims to mitigate the risk as much as possible by creating expert-designed, smart portfolios tailored to each user. Every dollar invested by an Acorns user is automatically diversified across more than 7,000 stocks and bonds in their exchange-traded funds. So you’ll avoid putting all your hard-earned nuts in one stash, making it easier to manage stock market volatility.
The Acorns model works exactly the same as other round-up micro-investment strategies. After every purchase, your spare change to the next dollar is automatically transferred into your Acorns account. Users can also decide if they would like to deposit daily, monthly or weekly investments as well as how conservative or aggressive their portfolio investments operate.
Empower studies your financial activity on a daily basis and takes the guesswork out of how much to spend and save for your weekly budget. Users can set a weekly savings goal, and the Empower AutoSave feature will analyze if your spending habits leave room to achieve your saving goals. If you have the extra cash in your account, the app will transfer up to four times a week to meet your ideal savings amount.
Empowers greatest distinction lies in its integration of user-preferred savings goals coupled with the technology’s ability to set aside money at the optimal time. When emergencies or extra spending creep up, the app will notice the spike in expenditures and will only transfer what’s safely allowed for your budget. This is a perfect platform for the realistic planner who knows their weekly budget goals but also wants to account for weeks with higher-than-usual spending, such as around the holidays.
However, despite best efforts to save, Empower recognizes that life happens and sometimes you may need fast cash to tide you over to your next paycheck. Get peace of mind with Empower Cash Advance which gives you access to up to $250^ with no interest, no late fees and no risk to your credit.
Qapital is a financial technology company that focuses on the human side of savings. By building their savings technology around human behavioral psychology, Qapital aims to maximize savings for the future without making you miserable in the now.
Similar to the other savings platforms, Qapital has built-in features like autosavings that pull from every paycheck. However, what truly separates Qapital from the fintech pack are their user-controlled Rules.
Rules operate on an IFTTT basis (If This Then That). You can link your Qapital account to a number of apps, including Facebook, Uber, and Fitbit, among others. Depending on your Rule, you might reward yourself with a little savings bump every time you hit your Fitbit steps goal for the day. On the other hand, you could dole out punishment for spending too much time on social media by automatically saving every time you post to Facebook. Tapping into our behavioral consciousness to contribute to savings appears to work. Users who utilize the IFTTT rules save nearly twice as much as Qapital users who only use the traditional autosavings feature.
Best Autosavings Apps Overview
|Savings App||Best For|
|Chime||High APY return|
|Digit||Regular savings bonuses|
|Acorns||Saving through investments|
|Empower||Flexible meeting weekly savings goals and Cash Advance|
|Qapital||Integrating with other apps for punishment/reward savings|
Related: The Best Online Savings Accounts
What is APY?
APY (annual percentage yield) sounds similar to APR (annual percentage rate), but the two use different formulas for determining annual interest. Your APR does not take compound interest into account, whereas APY does. The more APY compounds on your savings stash, the more benefit to your return.
How much can I expect to save using microsavings?
Many personal factors will determine how much microsavings and round-up apps will bolster your future fortune. Your income, expenditures and how frequently you utilize the user-controlled rules and features will create wild variances in savings results from user to user on the same platform. However, some microsavings technology companies share their users’ annual savings. The average Qapital user, for instance, saves $6,000 per year.
What’s the benefit of autosaving and microsaving methods when compared with a traditional, manual savings plan?
Other than convenience, autosavings and microsavings are more suitable for the way our brains make decisions about saving money. While we like to think of ourselves as rational beings, a growing body of research shows that our mood, stress levels and attitude about the future all influence how much we do or don’t save. The autosavings and microsavings methods spare us the mental torment and help us stick to a savings plan in a truly hands-off way.
How We Came Up with This List
When considering the best-automated savings and microsavings apps, we sought out platforms offering more creative ways to flexibly save while still offering a competitive APY. These factors are important because the point of microsaving is to make saving money as efficiently as possible for the user, and, of course, we want your accumulated saved money to offer you the highest possible return.
Many budgeters may preemptively determine that there’s just no room for savings in their budget without considering the handful of pocket change that could be put away on a regular basis. We focused on the apps that make wealth accumulation possible, and easy, for everyone.
The peace of mind that comes with a padded savings account can not be overstated. Whether you put your funds toward practical living expenses or an indulgent purchase, everyone could use a boost to their savings account.
These round-up, automated savings, and microsavings apps are tools that make growing a savings fund a possibility for people in any budget range. With the ability to automatically set aside a feasible amount today, these apps can help make our lives a little more secure in the future.