Are you new to the world of investing and looking for an app that will make things easy for you?
If so, then you might want to look at what Stash has to offer.
With a number of investment strategies based on your goals, risk tolerance, and areas of interest, Stash offers a robust investing platform with a simplified user experience.
Below, we’ll walk through the basics of how the platform to help you decide whether or not you should stash your money there.
Launched in 2015 and headquartered in New York, Stash is a mobile investment app that features a brokerage account and a variety of exchange-traded funds (ETFs).
The Basics of Stash
With the Stash app, you can start investing with as little as $5, and selecting investments is a breeze.
The app gives you access to at least 30 different themed investments. You can choose investments that suit your personal goals and risk tolerance. The app also allows you to purchase more investments, diversify, and track your progress.
Moreover, Stash has cost-friendly fees. You’ll need to pay just $1 month if you have up to $5,000 in your account or 0.25 percent a year if you have over $5,000 in your account.
What’s more, you won’t pay a dime for the first month of using Stash.
Here’s a quick look at Stash’s features and fees to give you an idea of what to expect from the investment platform:
First month FREE; $1/month under $5k; 0.25%/year over $5k
iOS App, Android App
Who Should Use Stash
This investment app is ideal for:
- Beginning investors: If you’re new to investing, Stash’s tools and resources can help you to hone your skills and simplify the investing jargon.
- Thematic/impact investors: With targeted investment options, you can invest with a purpose towards areas you’re passionate about.
- Investors who need guidance in choosing investments: Stash takes the guesswork out of investing, providing you with investments matched to your risk and goals.
What Makes Stash Unique
What sets Stash apart from its competitors is that it gives you total control over your investments. It allows you to choose various investments that make up your portfolio. If this is your first time investing, this may sound overwhelming.
However, Stash will guide you accordingly to ensure you make the right decisions, and the app also provides tips and tools to help you understand investing. However, Stash is not a robo-advisor.
Robo-advisors will not only advise you but also select investments for you. They’ll typically build investment portfolios for you based on your risk tolerance and income.
Stash, on the other hand, won’t create an investment portfolio for you. Instead, it offers you the foundation to construct your own investment portfolio.
You’re free to invest in anything that piques your interest.
How Stash Works
Stash has a lot to offer the new investor, making the process easy and helpful from step one of signing up.
Opening an Account
You’ll start by opening an account with Stash. You have to be 18 years or older to be eligible for an account. Beyond the age limit, Stash is flexible with its requirements.
You’ll need to provide your Social Security number and information to facilitate linking your bank account with your Stash account.
Assessing Risk Tolerance
Afterward, you’ll answer a couple of questions to help determine your risk tolerance. Your risk tolerance can be either conservative, moderate, or aggressive. Several factors are taken into consideration to derive your risk tolerance, including:
- Your age: The younger you are, the harder you’re likely to push the gas pedal. With age, risks become a bit more measured.
- Investment time horizon: How long you plan to invest to reach your goals will also impact the risk you take on.
- Investment goals: Are you looking to save for an education, secure your retirement, or just put your savings or tax refund to work?
Stash will offer you a selection of investment themes based on your risk tolerance.
Once you have provided the required information, which should take no more than a few minutes, you can start investing.
When you link your bank account with your Stash account, Stash will deposit some cash into your bank account to verify the account.
The account verification process usually takes no more than six business days. Once your account is set up, you can use the Stash Deposit screen to transfer money to and from your linked bank account.
With the Stash app, you can deposit or withdraw up to $10,000 per day.
You can’t link more than one bank account to your Stash account. Overall, Stash offers you hands-on control of investing. It also provides investing tips and guides to help you make informed decisions.
Features and Fees of Stash
Stash has loads of other valuable features and functionality that you need to know about. They include the following:
- Automated investments: This feature allows you to set up a regular deposit and fund your Stash account automatically.
- Stash Retire: With this feature, you can invest as little as $15 in Traditional and Roth Individual Retirement Accounts (IRAs).
- Fractional shares: This functionality allows you to purchase a small fractional share of an individual stock.
- Smart-Save: This functionality analyzes your income and spending patterns to determine when you have money to spare. Afterward, it automatically saves little amounts of extra cash into your Stash account, where it earns interest. You can also invest the money.
- Forecast tools: Stash has a tool that can foretell the impact your investing and saving might have over time. It helps you see how your smart choices are impacting your future.
- Educational resources: Stash has a wide range of educational materials that new investors would find valuable. The materials can be accessed from the app or via email.
- Security: This investing app utilizes 256-bit bank-grade encryption to ensure the safety of your personal information. It also uses SSL encryption to ensure the security of the information transmitted between the app and its servers.
- SIPC Coverage: The investments in your Stash account are covered by Securities Investor Protection Corporation (SIPC). This is accomplished via the clearing agency used by Stash, Apex Clearing Corp. SIPC protection covers up to $500,000 of any brokerage. This amount includes a $250,000 cash limit.
You can start investing with $5. And as a new investor, you won’t pay any fees in your first month.
Afterward, you will need to pay $1 per month if your investments fall below $5,000 and 0.25 percent per year if your investments are over $5,000.
You won’t pay any commission for stock trades, nor will you pay bank transfer fees for deposits or withdrawals. The costs of investing with Stash are reasonable but may not be as low as comparable robo-advisors.
Pros and Cons of Investing with Stash
Like any platform, Stash comes with its share of both pros and cons, which you should consider carefully as you make your decision on where to invest.
Pros of Stash
- A variety of investment options: Stash gives you the opportunity to invest in numerous investment themes, which it picks from among thousands of ETFs. It also suggests some individual stocks for you to choose from. Most robo-advisors create investment portfolios using a selection of between 6 and 12 ETFs only.
- Educational content: Stash is committed to ensuring that new investors understand what they’re doing and can invest with confidence. It achieves that by providing loads of educational materials.
- Competitive prices on larger accounts: You need to pay only 0.25 percent per year on account balances of at least $5,000.
- Low minimum deposit: Stash allows you to open an account with as little as $5.
Cons of Stash
- Slow trading execution: If you place an order today, it could end up being executed tomorrow. This can be frustrating if you are looking to trade your account actively.
- Expensive for small accounts: The $1 per month charged on accounts below $5,000 is quite high compared to the 0.25 percent Betterment charges per year.
Stash believes that investing should be accessible and straightforward.
As such, it offers a simple start-up process that could take less than 5 minutes, and you need only $5 to start investing. That makes Stash one of our ideal investment apps for beginner investors.
The fact that one can diversify their portfolio with as little as $5 is a significant advantage to the very small investors.
Stash may not work well for you if you are an active investor that prefers an active role in the investment process, or if you are looking for tax-advantaged assets.
If you are new to investing, however, you can’t go wrong with the app.