Does the Tip Yourself App Really Help You Save Money?

Saving money isn’t as easy for some Americans as it should be. According to a 2018 Federal Reserve report, 40% of adults can’t cover a $400 emergency expense. But by looking at alternate ways to save, you might find something that works for you.

If you have a hard time saving or prefer a carrot and stick approach, you could try Tip Yourself to start making progress toward your financial goals. Know that Tip Yourself isn’t a substitute if you already have a good strategy since it doesn’t earn interest. Anyone, however, might be able to take advantage of this app to help save money.

What is the Tip Yourself app?

The Tip Yourself app works in much the same way as tip jars at cafes and bars, where you give gratuity for good service. With the app, you tip yourself with your money for following good habits — or just because. The money you tip yourself comes out of your checking account and is held in an account at Tip Yourself’s partner, nbkc bank.

Sending tips to your virtual tip jar in the app allows you to save money when you go to the gym, avoid impulse purchases or eat a healthy lunch, among other things.

You can cash out anytime, and the money will be transferred to your checking account within two to three business days. Tip Yourself lets you create up to two tip jars, which allows you to have different savings goals, such as a vacation or a new car.

The basic Tip Yourself app is free. The company makes its money from interest on your savings balance (remember, you receive no interest on any money you save in your tip jars), and by offering an upgraded version of the app.

Tip Yourself Pro

For $9.99 a year, you can upgrade to Tip Yourself Pro. This unlocks additional tip jars, some of which have specific features that can help you save in other ways:

• With the Automated Tip Jar, you can set automatic deposits to be made on the same day every week, or at the beginning, middle or end of the month. You can update these as often as you want.
• The Savings Challenge Tip Jar allows you to work towards the 52-week savings challenge where you increase your savings each week by $1 to end up with $1,378 by the end of the year.
• You’ll also get access to a Hidden Tip Jar, which won’t display the balance to you unless you save up a preset goal so that you’re less tempted to raid it prematurely.

You’ll have access to up to 10 tip jars so that you can divide your regular savings even further.

Creating so many tip jars can help you break up your savings goals even further. Having an automated way to save can make sure that you set aside money if you forget to tip yourself.

Remember, however, there is no interest offered on your savings. An automated tip jar isn’t really any different from setting up automatic withdrawals into another high-yield savings account where you will earn money on your deposit — albeit with a less-fancy interface.

How does Tip Yourself work?

Using the app is pretty straightforward. Here’s what to know.

Sign up for the Tip Yourself app

First, you’ll need to sign up for the Tip Yourself app. You can download the app via your smartphone through the App Store or Google Play. Tip Yourself does not have a web browser-based interface. You’ll have to complete the sign-up forms, during which you’ll have to prove your identity and may need to submit a government-issued ID.

Once you’ve signed up through the app, you’ll need to verify your checking account. Tip Yourself does this the same way as many other financial institutions. It’ll make two small deposits into your checking account within one to two business days, and then withdraw them. Once you know these amounts, you enter them into the Tip Yourself app to complete the bank verification process.

You can start using the app right away, although the Automated Clearing House (ACH) transfers for your tips won’t take place until you’ve finished verifying your account.

Start tipping yourself

Once you’re signed up, you can start tipping yourself. In the app, you’ll choose a tip to deposit into your tip jar. The default tips are $2, $5 or $10, but you can choose any amount you want between $1 and $250 by selecting “New Tip,” and then “Other.”

Tip Yourself will then initiate an ACH transfer from your checking account to your tip jar, where it’ll typically appear one business day later.

Withdraw your tips

Withdrawing your tips is just as easy. You can do it anytime in the app — and as many times as you want — with no withdrawal limits. It’ll take up to three business days for your tips to appear back in your checking account.

How much does Tip Yourself cost?

The basic Tip Yourself app, with the ability to use up to two tips jars, is free.

A yearly subscription to Tip Yourself Pro is $9.99 and unlocks extra features, including up to 10 tip jars. These include the Automated, Savings Challenge and Hidden Tip Jars.

Who should use Tip Yourself?

Tip Yourself, which was founded in 2015, would be a great fit for two types of people: those who want a fun way to reward and motivate themselves for establishing good habits, and those who have had a hard time saving with other, more traditional methods.

Tip Yourself finds a loyal audience among this crowd, as evidenced by its 4.3 stars (280 reviews) rating on Google Play and its 4.7 rating (2,000 reviews) on the App Store at the time of publishing.

We wouldn’t recommend the Tip Yourself app to people who use a zero-sum budget. That’s because every penny is purposefully spent with this budget method, so there’s no leftover room for tipping yourself. Similarly, we wouldn’t recommend Tip Yourself to people who are looking to earn interest on their savings, or those who want a way to invest through apps.

Is Tip Yourself safe to use?

Yes. Tip Yourself uses the same industry-standard security practices that banks do. Similarly, because deposits are held at nbkc bank, your deposit is Federal Deposit Insurance Corp.-insured up to the legal limit.

The pros and cons of Tip Yourself

Pros

• Fun, innovative way to save
• FDIC-insured up to the legal limit
• Smooth, easy-to-use interface
• “Freemium” model with option to upgrade for more features at a reasonable price

Cons

• Doesn’t offer interest
• Doesn’t offer option to invest money
• Can only transfer money to and from one checking account
• Doesn’t provide overdraft protection

How does Tip Yourself stack up to the competition?

Luckily, when it comes to savings apps, Tip Yourself isn’t your only option. There are several other popular choices, and here’s how Tip Yourself compares with them.

Tip Yourself vs. Digit

Digit isn’t so much a way to reward yourself for doing good deeds. It’s an automated way to save. Digit, unlike Tip Yourself, analyzes your spending and your bank account balances to automatically pull out bits of cash that you won’t miss and put them into a separate savings account similar to a tip jar.

Digit doesn’t offer interest, but it does give you something back in the form of a quarterly savings bonus, worth the equivalent of 1.00% APY. Compared to Tip Yourself, you’ll pay more for these extra features. A subscription to Digit costs $5 a month.

Tip Yourself vs. Qapital

Qapital started out as a simple savings app similar to Tip Yourself, but over time it’s morphed into something more. Now, it’s essentially a replacement for your bank account, offering you the ability to open a checking account and a savings account that are held at partner banks. It offers a pitiful 0.10% APY on both the checking and savings accounts.

It offers a few unique features, such as creating custom savings rules. You can also choose how to divvy up any big deposits between your immediate needs and short- and long-term savings goals. Qapital also offers investment options, but you’ll pay more for them. Qapital charges between $3 and $12 a month, depending on the plan level.

Tip Yourself vs. Acorns

Acorns offers another unique way to save by rounding up your everyday purchases and depositing the difference into an investing account. You get to choose what type of portfolio you invest in — including conservative and aggressive — although since it’s an investment, you could lose or gain money.

You can choose automatic withdrawals, and shopping with some merchants can even net you more money in your investment account, making it quite different from Tip Yourself. Acorns charges $1 to $3 a month, depending on which plan you choose.

Bottom line

Will Tip Yourself actually help you save money? It depends.

If you’re already successfully budgeting and saving, chances are, no, Tip Yourself won’t be the game-changer that’ll help you save more. But if you’ve struggled with saving in the past and other methods haven’t worked — or if you want a way to reward yourself monetarily for following your lifestyle goals — Tip Yourself very well might help you save more.