Digit Launches New Tax Feature to Automate Refund Savings
This tax season Digit simplifies saving refunds worth $125 billion
SAN FRANCISCO, February 11, 2016 – Digit <https://digit.co>, the popular automated savings tool, in collaboration with CommonCents Lab, the financial decision making lab funded by MetLife Foundation, today announced a new feature that automates tax refund savings. Digit’s simple, automated approach to saving turns the tax season on its head by flipping it from an excuse to splurge into the year’s biggest savings moment.
Over 75 percent of Americans will receive a tax refund in 2016, totaling almost $125 billion nation-wide. Over 50 percent of people have less than $1000 saved at all, making tax refunds a key opportunity for most people to get ahead on savings.
By combining behavioral economics with smart technology, people can match their actions with intentions by giving Digit the ability to automatically save a predetermined amount of their tax return. This feature will be rolled out through tax season.
“The average tax return is $2800 per household, making it the biggest windfall of cash most people receive annually,” said Ethan Bloch, CEO of Digit. “This is the most significant savings moment of the entire year. By automating the process, Digit makes it incredibly easy for people to set aside a huge chunk of cash without spending a single mental synapse on making that decision.”
Behavioral experiments show that small changes can have a big effect, suggesting a pre-commitment to save at tax time increases the likelihood of savings. To further understand these behaviors, Digit has partnered with Duke University’s CommonCents Lab, a group that uses behavioral economics to identify new ways to help millions of low to middle income Americans improve their saving habits. The collaboration will investigate how technology that automates behavioral intentions affects savings.
“We often find that financial decisions are made in the moment, without thinking about the big picture or the long term,” said Dan Ariely, head of CommonCents Lab and professor of psychology and behavioral economics at Duke University. “By partnering with Digit, we can identify behavior-related challenges to dealing with money and design interventions that help people save more.”
Digit works by analyzing income and spending patterns in checking accounts, setting aside small amounts of cash – generally between $2 to $17 – that won’t be missed. These savings are moved into an FDIC-insured Digit account and can be transferred back into checking at any time, with no fees. With a dead-simple messaging-based user experience, Digit feels like texting with a friend rather than working with a bank.
Digit is an automated savings tool that lets customers ‘set and forget’ savings with a dead-simple messaging based user experience. Digit monitors spending and income patterns to save small amounts of money that won’t be missed. The company supports over 2,500 banks and credit unions and all Digit accounts are FDIC insured. Based in San Francisco, CA, Digit has raised a total capital of up to $13.84 million from Baseline, Google Ventures and General Catalyst Partners. Learn more at www.digit.co and @hellodigit.
About CommonCents Lab
CommonCents Lab, funded by MetLife Foundation, is an initiative to use behavioral economics to identify new ways to help millions of low to middle income Americans improve their saving and spending habits. It partners directly with banks, credit unions, companies and other nonprofit organizations to design, build and test solutions intended to help people make smarter choices with their finances. For more information on CommonCents Lab, please visit http://advanced-hindsight.com/commoncents-lab/ To learn more about MetLife Foundation, visit www.metlife.org.