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How does Finance AI categorize transactions?

Learn how the assistant chooses categories, asks clarifying questions, and remembers patterns.

Updated June 21, 20265 steps

Quick answer

Finance AI combines Plaid transaction details, your category list, your corrections, saved memory, and repeatable rules to categorize transactions. It asks you only when the answer is genuinely ambiguous.

Steps

  1. 1Connect at least one account so Finance AI can sync transactions.
  2. 2Choose or customize your categories during onboarding.
  3. 3Let the assistant work through uncategorized transactions.
  4. 4Answer any clarification cards when the assistant cannot confidently infer the right category.
  5. 5Correct categories when needed so future transactions improve.

What the assistant looks at

The assistant uses the transaction name, merchant, Plaid category, account type, amount direction, similar transactions, existing rules, saved memory, and anything you told Finance AI during onboarding.

For peer-to-peer apps like Venmo, Zelle, Cash App, and PayPal, the assistant tries to categorize by the memo or counterparty instead of treating every payment as a transfer.

Rules and memory

When a pattern is repeatable, Finance AI can create a categorization rule so future matching transactions are handled automatically. For broader preferences that are not tied to a merchant rule, the assistant can save memory that helps with future answers.

During background categorization, Finance AI applies saved rules before asking the assistant to make remaining category decisions. The assistant also uses your existing rules and saved memory as guidance for new transactions.

  • Rules are best for merchant names, memos, and amount patterns.
  • Memory is best for durable preferences, like how you think about reimbursements or side income.
  • You can override the assistant at any time by changing a transaction's category.

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