In today’s technology driven world, apps are all about making your life easier. Need dinner but too tired to cook? You can Postmate your next meal. Need a gift ASAP? Amazon Prime it.
The personal finance world has also embraced technology to simplify your life. There are even automatic savings apps that can help turbocharge your savings and make it effortless.
To learn more about what’s out there, let’s take a look at Chime and Rize. These options can get you on the right path to saving without the hassle. Read on to decide which of these apps is best for you.
Chime is a fee-free bank that is mobile-only and offers great automatic savings features. If you sign up as a Chime member and open a Spending Account (like a checking account), you can also have a Savings Account with sweet automatic savings features.
Using Chime, users can round up all of their purchases to the next dollar and save that change. In other words, you get rewarded every time you spend and the additional savings helps balance out some of your spending.
Let’s say you go out to lunch and spend $12.35. In this case, you’d pay $13 yet 65 cents would be deposited into your Savings Account. It may not seem like a lot but you have to think about the compound effect. It’s not just saving this time but it’s saving every time you spend money. This kind of consistency is what successful saving is built upon.
Aside from rounding up, you can also automatically save when you get paid. You may have heard that you should “pay yourself first” and Chime takes this to the next level by ensuring that you are saving the basic recommendation of 10 percent of your earnings.
One last thing: Chime is not only an automatic savings app but a fee-free, full-service bank account that can help you better manage your money.
Another automatic savings app on the market is Rize. Rize is an app that can help you save for short and long-term goals.
Using Rize you can set an unlimited amount of goals and save automatically. Want to save for your next trip and your next car? How about your daughter’s college fund and your birthday? You can save for all of the above – at the same time – using Rize.
The good thing about Rize is that you set up your own savings schedule and earn interest on your deposits. Rize currently offers 1.43% in interest. Chime also offers a tiny bit of interest on Savings Account deposits with an Annual Percentage Rate (APR) of .01%.
Yet, Rize is different from Chime in that it also helps you invest. For example, if you’re saving for long-term goals, Rize will actually invest your money into exchange-traded funds, which are a mix of stock and bonds, as well as cash. This enables you to “invest smarter” and put your money to work for you. It’s important to note that there is a 0.25 percent fee when investing for your long-term goals. Compared to many financial advisors that charge a one percent fee, this is pretty low-priced and competitive.
Aside from this, you can also supercharge your savings using Rize’s ‘Accelerator’ feature, which helps users increase their savings by one percent each month. Rize also has a ‘Boost’ option. This feature transfers spare change up to five dollars or five percent, whichever is less.
Lastly, Rize has a unique ‘pay what you want’ model. This means you can contribute a few bucks a month or nothing at all – if that’s what you wish. The app does recommend paying at least two dollars per month to access the investing part of Rize.
Chime vs. Rize: Which one is better?
Chime and Rize each have their own benefits as automatic savings apps. Chime is a great option if you’re looking to save for a rainy day while also accessing fee-free banking. Rize is a bit more robust in that you can save and invest.
If you want to try one app first, you may want to go with Chime, especially if you’re looking to ditch a big bank while also automating your savings in a simple, effective way. But, if you’re looking to maximize your long-term savings goals and do more than save for a rainy day, Rize could be the better go-to option for you. Since Chime is a fee-free bank and not just a savings app, you could use both Rize and Chime together to save and invest for your short and long-term goals.
Whatever you decide to do, the key is to get started with an automatic savings app. This way you’ll save more money – effortlessly.