How many times in the last year did you think about increasing your savings rate only to continue with business as usual? Well, automatic money savings apps are here to bail you out!
The reality is that a majority of Americans are not putting enough cash aside. Thinking about saving money and actually doing so are two different things.
While you may have found it difficult to part with money to build your emergency fund or retirement account in the past, the recent availability of apps that round up your spare change and save or invest them is a game-changer.
Benefits of a Money Savings App
The best automatic savings and investing apps help you to save and reach your financial goals at a lower cost. They are stress-free and are available at a lower cost. Other benefits they may offer include the ability to:
- Save small sums of money effortlessly and without impacting your lifestyle e.g. by rounding up your purchases and saving the difference
- Budget, set and reach multiple money goals
- Earn interest on your savings
- Invest automatically and at a lower cost
- Use your smartphone to do all of the above
Perhaps the biggest advantage of these spare change apps is that they take the chore out of saving. You can simply set-it-and-forget.
Best Money Saving Apps For 2022
These are some of the best apps to consider using this year.
Acorns is well known as one of the first micro-investing apps to be introduced in the U.S. The Acorns app rounds up purchases made to the credit or debit cards linked to your account and saves/invests your spare change automatically.
Acorns offer three different accounts:
Acorns Core: This allows you to invest in a taxable investment account and comes with a $1 per month fee. It is free for college students.
Acorns Later: This account allows you to save for retirement using an Individual Retirement Account. You can begin saving with as little as $5 and the combination of Acorns Core and Acorns Later costs $2 per month.
Acorns Spend: This is a checking account and debit card that helps you to save, invest, spend, and earn. You can choose all three accounts (Acorns Core, Later, and Spend) for $3 per month. The Acorns Checking account has no minimum balance or overdraft fees, and unlimited free ATM use.
- Great for college students
- Automatic savings and investing
- Low $5 minimum investment
Is The Acorns App Safe?
Acorns is a member of the Securities Investor Protection Corporation (SIPC) and your investments are protected up to $500,000. Your checking account (deposits) are also insured up to $250,000 by FDIC. In addition, they protect your account using 256-bit encryption.
The Digit app helps you to save money using a hands-off approach. After you sign up and add your bank account, their algorithm analyzes your spending and automatically saves money on your behalf several times a week.
The money is transferred from your checking account into an FDIC-insured Digit savings account. Their algorithm ensures that you do not miss a bill payment and they will reimburse the fees for up to two instances of overdraft.
Fees: Digit is free for the first 30 days and then costs $2.99 per month.
- Your account earns a 1% annual interest rate (savings bonus) that is paid out every 3 months and you can withdraw your funds whenever you want.
- Digit is available on iOS and Android devices.
- You can set up multiple savings goals on the app.
- Earn $5 for every friend who signs up using your referral link.
- You can connect with more than 2,500 banks and credit unions in the U.S.
Cons: The $2.99 monthly fee is a bit hefty if all you are saving is spare change.
Is Digit Safe?
Your funds are kept in an account that is FDIC insured up to $250,000.
Wealthsimple is one of the most popular robo-advisors in the United States, Canada, and the U.K. They have more than $3 billion in assets under management.
Robo-advisors simplify the investment process by automating everything. They are also cheaper and use low-cost ETFs which cost much less than traditional mutual funds. When you open an account, they ask you a few questions to determine your risk tolerance and investment goals.
An approximate investment portfolio is then recommended to you and you can set up automatic deposits. A feature you can ‘turn on’ on your Wealthsimple account is the “Roundup” which allows you to round up your purchases to the nearest dollar and invest your spare change. Wealthsimple also offers a smart savings account that pays high-interest rates.
Fees: Wealthsimple charges a 0.50% fee on accounts with less than $100K and 0.40% on portfolios exceeding $100K.
- Their management fee is much lower than what is charged by the average mutual fund manager.
- The Wealthsimple app is highly rated on both the App Store and Google Play.
- Your investment or savings account requires no manual work on your part (i.e. re-balancing is done automatically).
- They offer Halal and socially responsible portfolios if you are interested.
- Free financial advice
Cons: The app does not offer budgeting or goal-setting functions.
Is Wealthsimple Safe?
Your Wealthsimple account is protected by SIPC up to $500,000 in the U.S. ($250,000 for savings). In Canada, your funds are insured up to $1 million by CIPF/CDIC.
Learn more about Wealthsimple in this review.
Chime is similar to Qapital in that it is a bank that doubles as a savings app. When you open an account, you receive a debit card, checking, and savings account. Every time you make a purchase or pay a bill using your Chime debit card, the app automatically rounds up your purchase to the nearest dollar and saves the change. You can also automatically transfer 10% of your paycheck into savings.
Chime users have access to more than 38,000 free ATMs.
Fees: There are no monthly fees, no overdraft, no minimum balance, and no transaction fees. There is a $2.50 fee when you conduct a cash withdrawal over-the-counter or use an ATM outside of the network.
- No-fee banking
- Automatic savings
- Get your paycheck 2 days early
- Available on iOS and Android
Cons: They do not have a brick-and-mortar location you can walk into and the interest rate paid is very low at 0.01% APY.
Is Chime Safe?
Your deposit account with them is FDIC-insured.
Qapital is an online bank and savings app that helps you save and invest easily using goals.
How it works: Once you set up your account, you can apply some rules to fund your goal. Some of the rules available are:
- 52 Week: Determine how much money you set aside every week of the year e..g. save $1 in week 1, $2 in week 2, etc.
- Spend Less: Save the difference whenever you spend less than you have budgeted.
- Guilty Pleasure: Every time you give in to temptation, you gotta save some moolah!
- Round-Up: Round up your purchase to the nearest dollar and save the difference.
- Payday: Save some money whenever you receive a paycheck.
- Set and Forget: Choose how much money you want to transfer to your savings daily, weekly, or monthly.
- Freelancer: Save a percentage of any deposits in your account.
- Apple Health: Pay yourself when you workout, walk, run, or take a certain number of steps per day.
Qapital also offers a spending account that functions as a checking account and is linked to a debit card. The Qapital Invest account uses pre-built portfolios composed of ETFs.
Fees: Qapital has three membership plans – Qapital Basic ($3/month), Qapital Complete ($6/month), and Qapital Master ($12/month). There is a free 30-day trial period.
Pro: Qapital makes it super easy to save money.
Cons: The interest rate of 0.1% is measly.
Is Qapital Safe?
Your funds with Qapital are FDIC-insured up to $250,000.
Empower is a mobile bank that offers a high-interest savings rate, cash back on debit purchases, and a free personal assistant that helps you stay on top of your money.
Benefits of Empower:
- Automatic savings with high-interest currently at 2.15% to 4.30% APY
- Up to 2% cash back on your first $1,000 debit spending
- No monthly fees
- Access to 25,000 free ATMs
- Easy budgeting app with alerts, trackers, and reports
Is Empower Safe?
They use 256-bit encryption to protect your account and your funds are FDIC-insured up to $250,000.
7. Clarity Money
This personal finance app can help you cancel unwanted subscriptions, track your spending, and access your free credit score.
Your savings are kept in an online saving account from Marcus by Goldman Sachs. This account currently earns 2.25% APY and is FDIC-insured. The app is available on iOS and Android.
Fees: Clarity Money is free to use.
8. Bank of America – Keep The Change
If you bank with the Bank of America and have a checking account (debit card) and savings accounts, you can use the Keep The Change Program to boost your savings rate.
Whenever you make a purchase using your card, they round up your purchase to the nearest dollar amount and transfer the change from your checking account to your savings. For example, if you buy coffee for $2.25, it is rounded up to $3 and 75 cents is automatically saved.
Fees: There are no fees to use this spare-change saving feature.
- Automated savings
- Integrated into your regular banking
- Available on the App Store and Google Play
Cons: You need to have a checking and savings account with BofA to use this program.
9. Stash Invest
Stash automates the entire investing process so you don’t have to worry about it. Simply connect your bank account, choose how much you want to invest (weekly or monthly) and the app does the rest. You can start investing in stocks and ETFs with as little as $5 using fractional shares.
Fees: Pay $1 per month for the Stash Invest and custodial accounts. For their retirement accounts (Traditional IRA and Roth IRA), the fee is $2 per month.
- Good for beginners to learn about investing
- Automated investing
- Multiple investment options
- Available on iPhone and Android
Cons: The $1/month fee can add up if you are not investing regularly.
Is Stash Safe?
Your funds are kept in the custody of Apex Clearing Corporation and is SIPC insured up to $500,000.
10. Bonus – Moka
Moka is the Canadian version of the micro-investing app, Acorns. After you sign-up and link your bank account, the app automatically rounds up your purchases and invests them in a professionally managed low-cost ETF investment portfolio.
You can up the ante and reach your money goals faster by using ‘multipliers’ to increase your contributions. The app also allows you to set multiple financial goals.
Fees: Moka costs $3 per month.
- Socially responsible portfolios are available
- Earn cash back from your favorite brands
- Free withdrawals
Cons: The monthly fee can become pricy if you are only saving a small change every month.
Is Moka Safe?
Your funds are insured by the CIPF for up to $1 million. The app also uses 256-bit encryption to secure your private data.
Join Moka here (Canada only)
Automatic savings apps can help you get your finances back on track. Set it and forget it and see your net worth grow without much effort on your part.
Which money saving apps are you using to reach your financial goals today?