Stash App Review 2021: Fractional Share Investing
You know you should be investing but quite honestly don’t know how. All those numbers are such a jumbo and trying to keep up with the news to understand which companies are on the rise and which are faltering is time-consuming and confusing. Yet you aren’t already financially set meaning you can’t afford to pay someone to do your investing for you.
That’s where Stash comes in. This app wants to make investing approachable and targets first-time investors looking to enter the world of investing without a lot of capital. Learn how it works in our review of Stash.
- What is Stash?
- How does Stash work?
- The bottom line
What is Stash?
Stash believes "everyone should have access to tools, guidance, and confidence to grow personal wealth and live a better life." Founded in 2015 by Wall Street investors Brandon Krieg and Ed Robinson who wanted to help everyone invest, regardless of income, the company now has more than 5 million customers who invest in thousands of stocks and ETFs (exchange-traded fund) with $1 or less.
How does Stash work?
The app touts its philosophy called The Stash Way. This provides a beginner-friendly way of understanding investing and how and why it is a long-term endeavor. As such, investing even little matters because Stash sees its investments growing an average of 5% each year. Using automated tools to set a schedule, round-up, and Smart Stash means all of those "littles" add up.
Plus, Stash truly diversifies your investment so you aren't putting all of your funds in one place.
To become a new investor and enroll in the investment app, start by entering your email address. You will then be guided through a questionnaire to create your financial profile and select your plan.
To help determine your financial profile, you'll select what your interests are for investing. You will be required to provide your Social Security Number but it is not used to check your credit and will not affect your credit score.
The entire signup takes less than 10 minutes and you get to choose the plan that works best for you, as I'll detail below.
You will continue to be guided easily through the steps of choosing and enrolling in the features of the Stash account you select.
How much does Stash cost?
Unlike other apps touting free investing services, Stash is a paid service but starts at just $1 per month with its highest level of service only $9 per month. The pricing structure is a flat fee:
"Dip your toes in the investing world" is this beginner account at just $1 per month. It includes a personal investment account, a bank account with Stock-Back Card, $1,000 in Life Insurance from Avibra, and free financial education.
For just $3 per month you can "commit to investing and saving." This account includes all in a Beginner account but adds a retirement account.
The top tier works to "maximize your financial power." It offers all found in a Growth account but provides an investment account for two children, double stock rewards, an additional $9,000 in life insurance, and a monthly market insights report.
You are free to change your plan at any time to upgrade or downgrade and your account opening of your Stash debit card is subject to bank approval.
There is no opening deposit required for an investment account but if you deposit $5, Stash will match it.
Stash investing features
Investing through Stash will provide you fractional shares. This means rather than owning a share of stock at its full price, you are able to join the Stash community and pool your funds to afford high-priced and higher-earning stocks and receive a fractional percentage on the returns.
The company is not a robo-advisor and will not direct you to stocks to purchase. Instead, your contribution is spread to its current individual stocks and ETFs, of which the company has more than 1,800. You will get to choose an investment portfolio of these stocks, using the suggestions that coincide with your goals.
The earnings you make on your investment are automatically reinvested, know as DRIP (dividend reinvestment program).
You can select your risk tolerance as you complete your enrollment questionnaire (and change it at any time). Risk levels are conservative, moderate, and aggressive. From here, you'll be directed to recommended investments for your preference.
- Stocks. Fractional stocks are available to search in energy, finance, health care, industrials, materials, media, real estate, retail, tech, utilities, and consumer staples.
- ETFs. Available ETFs include bonds, broad market, commodities, diversified mixes, global exposure, goods and services, missions and causes, technology and innovation, and thematic categories.
To help you select from your investment options, you will have a chance to read about them in easy-to-follow reports that include the ticket symbol, last price, expense ratio, level of risk, and who the company is.
Stock-Back debit card
Your Stash enrollment provides you with an online bank account through Green Dot Bank that does not require a minimum balance and does not charge overdraft fees. Your funds are available through 19,000 fee-free ATMs.
The Stock-Back feature of this account is doesn't give you cash back on the money you spend, instead you will receive stock in the retailers in which you shop, such as Amazon. Stash offers 0.125% if you are enrolled in the Beginner program or Growth program but double that if you are in the Stash+ program.
And before you think the advantage is only good at places you do not shop, know that Stash's Stock-Back is good when you shop at Walmart, CVS, Apple, and Amazon, and when you are grabbing a bite at McDonald's, filling up the tank at BP, and shopping for groceries at Costco, among many, many others.
You can even earn up to 5% on brands you particularly love.
For investors who enroll in Stash+, choose a traditional IRA or a Roth IRA with as little as $1.
Financial management app
Your account will allow you to track your spending, pay bills, and save for goals with its budgeting and tracking tools. It also provides a retirement calculator.
Receive advice from professionals on budgeting to retiring to help understand ways you can grow your finances. They actually will connect you to real people by phone and email.
Those enrolled in Stash+ receive custodial accounts for up to two children to help them learn and set up their own investment accounts. These are available for anyone under 18, even if you aren't a parent, and also require just $1 to begin funding.
Stash banking features
As you receive a bank account with your enrollment in Stash, let's review those features. The first is that you automatically get a debit card with no credit check. (They use your Social Security Number to confirm your identity.) This account is specifically for you to earn without debt or interest — no APY and no APR.
There are no fees associated with a Stash account. There are also no minimum balances you need to obtain. You won't be charged with overdraft fees because you simply cannot go over your limit. This means you may have a charge denied, but you won't be paying hefty fees and going negative.
Because your investing and bank account are connected, you will not have to wait for your investments to grow. Stash invests as you spend.
Early direct deposit
By enrolling in direct deposit, you'll have access to your paycheck 2 days early, and it gives you a chance to invest and save early with this feature.
Using the app's tools, you can create simple budgets to separate your money into various spaces and help you stay organized. You can set automatic savings, set target dates and amounts for goals, analyze your spending by category, and track your progress.
Using the app to manage your account gives you mobile check deposit, enrollment in Apple or Google Pay, and the ability to lock your account from your phone should you notice suspicious activity.
You won't pay a fee to withdraw money from your account at Stash ATMs. Stash is a member of the Allpoint ATM network, which has 19,000 locations at retailers like Walmart, Walgreens, and RiteAid.
If you use an out-of-network ATM you will have to pay a $2.50 fee.
Pros & cons
User-friendly investment apps
Anyone taking their first steps into investing will find Stash easy to use. You can trust the company to manage your funds and take a hands-off approach but the app works to teach you so you can improve and grow your funds into a diversified portfolio that meets your risk tolerance.
Your spending can help you earn more with when Stash invests a percentage into your portolfio.
With the Stash checking account, you won't pay monthly fees, get free ATM usage, and connect directly to your brokerage account.
While the monthly fee appears low, the flat-fee is actually a con as it means you could be paying a higher annual fee than competitors who charge a percentage fee on your earnings. This is only for accounts with investments lower than $5,000; once you cross that threshold, your earnings will make the fee worthwhile.
Stash vs. competitors
|App||Cost||Minimum investment||Investment options||Additional features|
|Stash||$1 - $9/month||$1||Stocks, ETFs||Debit account, IRAs|
|Acorns||$1 - $3/month||$5||ETFs||Checking account, retirement savings|
|Betterment||0.25% fees||$0||Debit account, IRAs||IRAs, financial advisors|
Acorns is an introduction for new investors, as well. It's tier structure is similar: $1 per month for Lite, $3 per month for Personal, and $5 per month for Family. These provide an investment account with a checking account at the personal level and investment accounts for the family program.
You do not need a minimal amount to open your account but need at least $5 to begin investing in the pre-built portfolios offered, all of which are ETFs. Acorns offers a round-up feature, a checking account, and a retirement savings program called Later.
Like Acorns and Stash, Betterment is a robo-advisor that does not require a minimum account but instead of charging a monthly fee will charge you 0.25% on its Digital tier and 0.40% on its Premium tier.
Betterment invests in total stock market, value stocks, international developed market and emerging stocks, high-quality, municipal, inflation-protected, high-yield, short-term, international developed, and international emerging market bonds.
You will not have any financial help unless you pay for an advice package that will connect you to financial advisors and ranges from $199 to $299.
Who should or shouldn't use Stash?
Should: Begining investors
The program is designed specifically for newbies who want to try investing but don't know how. Stash walks you through your investments without requiring a lot of capital and lets you slowly grow.
Shouldn't: Experienced investors
Because this is designed for beginners, experienced investors will find the fractional investments don't quite meet their needs. If you are familiar with investing, use a brokerage and purchase full shares.
Is my money insured?
Stash accounts are held by Apex Clearing, which is registered by FINRA. Investments are covered up to $500,000.
Is Stash only online?
This investing app is available for Apple iOS and Android but you can access your account from a desktop, as well.
The bottom line
Stash works well for new investors looking to dip their toe into stocks and ETFs. Use the app to learn and adjust your goals and portfolios. Is it meant to be your end-all investment account? Not at all. It's there to teach you and when you are ready to take bigger steps, you can move into other brokerage programs.