By: Eric Rosenberg
Updated: February 27, 2019
In the old days, I used to walk in the door at home and put my coins in old Las Vegas slot machine cups. When they filled up, I would take them to the bank and find myself depositing hundreds of dollars into my checking or savings account. But these days, I hardly ever use cash and rarely find myself with change at all!
To replace the trusty change cup, a new crop of apps have emerged that help you round up the purchases you make with credit and debit cards to automatically save, invest and even pay off debt.
Even better, some of the best automatic round-up apps are free to use or have a free version available. Read on to learn how they work and if you should use a round-up app with your money.
How Round-up Savings Apps Work
Round-up apps connect to your bank and credit card accounts to monitor new transactions. Each time you make a purchase, the app calculates what would happen if you had made a purchase with cash. For example, if you buy lunch for $7.75 with your credit card, the app would round up to $8.00 and transfer 25 cents from your checking account to your goal.
Some apps offer the option to amplify your savings. Rather than saving just 25 cents, you could turn on a feature to double your round-up and save 50 cents on the same purchase.
Most round-up apps will combine purchases from a period of time and make one transfer. For example, if you had round-ups for 10 cents, 50 cents, 25 cents and 40 cents in one day, it would combine them and transfer $1.25.
If you do get a round-up app, be on the lookout for fees. Saving money is great, but it may not be worthwhile if you have to pay a lot to transfer your money from one account to another or even just to use the app.
The Best Apps That Round Up Purchases
Here are a few of the best round-up apps you can find today. This is not an exhaustive list, and some banks even offer this feature with existing accounts.
Best Round-up App for Saving
Qapital is one of the most powerful and full-featured round-up apps (read the full Qapital review). It gives you the option to save for multiple goals at once using round-ups and other savings rules. It supports most banks and popular payment methods in the United States.
I’m currently using Qapital to save for a small plane (I’m a private pilot), a trip to Iceland, and to buy a rental property. In addition to round-ups, it offers additional single transfers, recurring transfers, a percentage-of-income transfer, and other useful rules.
You can also connect to the IFTTT website and make nearly anything a rule. For a short while, I saved $1 every time Donald Trump put out a new message on Twitter, but his habits made my savings rate a little more aggressive than I wanted so I turned it off.
You can upgrade your account to include a debit card and investments for a fee, but the basic savings features are all free.
Best Round-up App for Investing
- Minimum Investment: $0
- Fees: $1/month under $1 million; 0.25%/year over $1 million; FREE for under 24 and in college; IRAs are an additional $1/month; $3/month for Spend and Later
- Website Access: Yes
If you just want to invest, Acorns is the place to go. Acorns is a popular app that gives you the ability to round up purchases to build an investment portfolio. You can invest in a taxable account with the starting Core account. Acorns recently incorporated its acquisition of Vault and turned it into a retirement account called “Later.”
Acorns is cheap, but it isn’t free. It costs $1 per month for Acorns Core, $2 per month if you use both Acorns Core and Acorns Later, and $3 per month if you use Acorns Core, Acorns Later and the Acorns Spend checking account. I’m on the Acorns Core + Acorns Later plan myself, as it is a convenient and easy way for self-employed persons to save for retirement.
Acorns automatically choose a portfolio of stock and bond exchange traded funds (ETFs) for you. You never have to pick a stock or anything else. Just choose between one of five portfolios based on your risk tolerance, and Acorns takes care of the rest.
Acorns offers round-up multipliers and other features to increase your savings rate, one-time contributions, and the opportunity to earn money back from some purchases through a program called “Found Money.”
Using round-up apps to pay off debt
If you have debt, Qoins can help you pay it off with round-ups. Qoins charges $1.99 per month. The company claims that more than $3.5 million of debt has been paid off through the app. It may seem silly to spend more money when in debt. But if it will help you really get things paid off and save you a ton of money on interest, it can be worth the $1.99 per month it costs.
Users start by downloading the mobile app on Android or iOS. Once you link your credit and debit card accounts, Qoins will start tracking and rounding up. Funds will be sent to pay down the debt on the account’s regularly scheduled monthly due date.
Should You Round Up Your Transactions?
Rounding up your purchases does not make sense for everyone. If you live paycheck to paycheck or keep a very low checking balance, you could accidentally find yourself out of money due to an automatic transfer.
Outside of that scenario, however, round-up apps are great. They can help you save more, invest more, and pay off debt without having to think about it. And that’s a win for anyone. And it makes sense for a wide range of uses.
What is your money goal? Odds are you can round up your way to success.