Over the past few years, there has been an explosion of apps in the microsavings and investing space. We’ve taken a look at several of those companies, including Qapital, Digit, and Dobot.
Most of these apps have the same basic objective. They’re designed to help users set aside money automatically, so they can boost their savings rate.
The premise is simple: by automating the act of saving, these apps eliminate the human element and increase the likelihood that we actually save money instead of finding alternative uses for our cash.
While there’s plenty to like about these types of apps, some of them have their drawbacks. Two come to mind immediately. One, most microsavings apps don’t pay any interest. And two, you’ll often have to pay a monthly fee to use their service.
Qapital is totally free, but Digit and Dobot recently started charging monthly fees. I don’t like paying a fee to save my own money. That’s why I’ve been on the lookout for microsavings apps that offer more bang for your buck (or perhaps even bang for no buck at all!).
That’s where Rize comes into play. Rize is an automatic savings account that makes it easy for users to stash their cash in a savings account and earn interest on their funds! On top of that, Rize offers a much higher interest rate than you’ll find at most banks and lets users decide what they want to pay for those services!
What is Rize?
Rize is a microsavings app that launched in April 2017. Their goal is to make saving so simple that you ditch your other savings accounts and use Rize exclusively.
To accomplish this mission, Rize offers several features that set them apart from other microsavings apps on the market. For starters, any money you save with Rize will earn interest as long as you leave it in your Rize savings account. Right now, Rize users are earning 1.65% APY! That’s more than 10x what you’ll earn at most traditional banks. Rize also offers users the ability to jumpstart their savings growth by investing their funds in exchange-traded funds (ETFs).
How Does Rize Work?
Rize has a structure that is unique among microsavings apps. Rize is operated by Rize Advisors, LLC, an SEC Registered Investment Advisor. This means that the funds you save with Rize are technically sitting in a brokerage account (i.e., investment account) rather than a standard savings account. That also means that your funds aren’t FDIC insured, but instead are covered by the SIPC (Securities Investor Protection Corporation).
Sound confusing? Don’t worry – it’s not as complicated as it might seem. Rize still functions just like a regular microsavings app even though your funds are held in a brokerage account.
Let’s start from the top with the sign-up process.
Getting Started with Rize
Opening an account with Rize will take you no more than five minutes.
Here’s how it’s done:
- Head over to the sign-up page. (Click here to take advantage of the Rize $5 sign up bonus!)
- Enter your personal information to open your account.
- Create your first savings goal.
- Link your bank account.
- Decide how much (or how little) you want to pay.
It’s really that simple. And once you’re done, all you have left to do is perfect your savings goals and Rize will take it from there!
Once you’ve completed the sign-up process, one of the first things you’ll want to do is create more savings goals.
There’s no limit to the number of individual savings goals you can create. Rize offers a few suggestions for goals such as building up your emergency fund, saving for a future down payment on a house, or paying down debt. Rize also lets you create a custom goal of your own.
Just choose a name for your goal, the total amount you want to save and how much you can commit toward that goal each month. Based on that information, Rize will tell you what provide an estimated completion date for your goal.
Once your goals are set, Rize functions like most other microsavings apps. Rize will automatically transfer funds from your checking account to your Rize account according to your instructions.
In addition to automatically handling deposits on designated dates, Rize offers two “Power-Up” features.
Accelerate. This feature gradually increases your monthly saving rate by 1% each month. The point is to automatically increase your savings in a way that’s practically unnoticeable, but after a year you’ll be saving 12% more per month than when you started! Over time, those extra savings can make a big difference!
Boost. This feature monitors your linked account to find extra money you won’t miss if it were transferred to your Rize savings account. Rize will pull out spare cash once or twice a week. Transfers range from a few cents to $5 or 5% of your monthly savings (whichever is lower).
Both Power Ups are automatically activated when you sign up for your Rize account. You can easily turn them off at any time by going to the Profile of your account.
Investing with Rize
We’ve already covered the standard savings program that allows users to earn interest on the money set aside in their Rize account. But Rize also gives users a second option for achieving their savings goals – you can invest your money too!
When you pursue your goals by investing, Rize will invest your money in a set of exchange-traded funds (ETFs). Based on the time horizon you set for your goal, Rize will determine the appropriate asset allocation. If your goal is of the short-term variety, Rize will hold more of your savings in cash to limit the risk of losing principal and not having access to funds when you need them. For longer-term goals (i.e., retirement), on the other hand, Rize will invest more of your money in stocks and bonds since you can afford to wait out major market fluctuations. And as you approach your target date, Rize will gradually rebalance your asset allocation to help you avoid unnecessary risk.
How Much Does Rize Cost?
One of the most attractive things about Rize is how affordable their automatic savings service is. Rize asks you what you think their service is worth and lets you set your own fee. That means you can pay as little $0 and use their services for free. Maybe you’ll pay a little more after a couple months when you see the value Rize provides. The point is, what you pay is up to you!
If you’re interested in investing with Rize, you’ll pay a monthly fee of $2 plus an annual 0.25% account management fee. The 0.25% fee is in line with the fees you’ll pay for robo-advisors such as Betterment and Wealthfront. However, that $2-a-month fee makes investing with Rize a little costly, especially for users with low account balances.
Rize $5 Sign-Up Bonus
Right now, Rize is offering a $5 bonus for new users. To be eligible you just need to sign up using a special referral link (like the one below).
Once you’ve opened your account, you’ll be able to invite your friends and family so you’ll both get $5 when they open an account.
Pay What You Want. You tell Rize what you’re willing to pay for their service. The price you pay is truly up to you!
- Earn Interest. Most, if not all, microsavings apps won’t pay you any interest on your savings. Rize is different.
- Unlimited Savings Goals. Rize lets you set multiple savings goals, each with unique savings amounts and frequency.
- No Minimum Balance Requirement. No minimum initial deposit makes it easy for anyone to get started with Rize.
High Investing Fees. You won’t have to look hard to find microinvesting apps with lower fees.
- Not Ideal for Long-Term Financial Goals. You might want to park your long-term funds somewhere else instead of settling for relatively low interest rates or high investing fees.
Is Rize Right for You?
There are plenty of microsavings apps to choose from. With its unique features, Rize sets itself apart from the pack and is a great option.
With no minimum balance requirements and a pay-what-you-want feature, Rize is ideal for folks who want a little nudge to start saving money.
Rize also raises the bar by allowing users to earn interest on their savings. While you’ll pay a small premium to take advantage of the investing component, there’s something to be said about the convenience of being able to save and invest on the same platform.
The bottom line is that Rize makes it easy to automatically set aside money so you can achieve your financial goals.
If you’re thinking of trying out a microsavings app for the first time, why not give Rize a shot? Get $5 to start out and pay nothing while you figure out if the service is right for you. Sounds like a good deal to me!