Whether savings and checking accounts originated in the branch or were set up online, most consumers prefer the ease of managing money digitally. In fact, 60% of account holders use online banking at least weekly, according to a 2016 survey performed by Accenture. This explains, in part, why there’s such growth in FinTech--the buzz term for financial technology. FinTech web or mobile application tools have sprung up to fill a void left by banks. Here are seven that may help you save money.
Major banking institutions allow you to set up automatically recurring transfers from your checking account to your savings, but apps can allow you to more exactly determine how much to set aside, with minimal effort on your part.
The tagline, “Save money, without thinking about it,” explains Digit’s philosophy. To clarify further, the company analyzes your checking account spending on a daily basis, then schedules a calculated "safe" amount to transfer into a free Digit savings account.
Similarly to Digit, Rize moves money from your checking account into a separate savings account. Unlike its peer, Rize does so after each of your paychecks comes through (not on a rolling basis) and also helps you to be mindful (not absent-minded) of the whole process. It accomplishes the latter by assisting you in setting savings goals for your new Rize account, whether you aim to put aside funds for student loan payments or your next spring break vacation.
This is the Digit or Rize of investing. Acorn takes “life’s spare change” — or the amount of money left over when it rounds up your purchases to the nearest dollar — and invests it across 7,000 stocks and bonds it considers to be low-risk. The resulting “micro-investing” account comes with a $1 monthly fee and a 0.25% interest charge for accounts exceeding $5,000 in value. It is offered free of charge, however, to college students for a period of four years.
While some 20 million people use this free platform to track balances and pay bills, its budgeting feature pumps out suggested allotments — say, $75 for clothing and $150 for gas — based on your past spending. It also leaves you room to customize your budgets as you see fit.
YNAB, or You Need a Budget, is to Mint what Rize was to Digit — a heightened, and pay-to-use, product for the goal-oriented consumer. For a $50 annual fee, YNAB will help you micro-manage your money toward a significant milestone, such as saving for a home or paying off credit card debt. Along the way, its weekly reports keep you in the loop on your loot; you can also set up alerts whenever you hit a preset spending limit.
Seemingly ensconced in today’s social lexicon, Venmo allows you to send or receive money by serving as the middleman between your checking account and your friend’s, regardless of which bank you each belong to. Like PayPal, there are no fees whatsoever for this kind of transaction.
Speaking of effective middlemen, TransferWise can help you avoid the typical $45 to $50 charge for completing an international wire transfer. It does so by offering customers the mid-market exchange rate, not the rate that an individual bank may quote. Banks administer higher exchange rates because of three hidden fees: an incoming fee to receive a wire, an outgoing fee to send one and an exchange fee when switching currencies. A third party like TransferWise, or another peer-to-peer exchange service, can help you save on all three costs.