Are you new to the world of investing and looking for an app that can help 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.
Started 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)1.
The Basics of Stash
With the Stash app, you can start investing with any dollar amount2, and selecting investments is a breeze.
The app gives you access to more than 250 ETFs and stocks. You can choose investments that suit your personal goals and risk tolerance. Through this app, you can easily purchase investments, diversify and track your progress.
Moreover, Stash has cost-friendly fee options.
Here’s a quick look at Stash’s features and fees to give you an idea of what to expect from the investment platform:
Tiered plans: $1 / $3 / $9 per month (see below for more details)3
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 helps take the guesswork out of investing, providing you with investment options 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 help guide you to make 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 can be free to invest in anything that piques your interest.
How Stash Works
Stash has a lot to offer to 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.
You’ll need to provide your Social Security number and other information to facilitate opening your account linking and linking your bank account with your Stash account.
Assessing Risk Tolerance
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 can push the gas pedal. With age, risks may become a bit more measured.
- Investment time horizon: How long you plan to invest to reach your goals may 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?
Once you have provided the required information, which should take no more than a few minutes, and successfully opened and funded an account, you can start investing.
One of the means that Stash uses to verify account ownership is micro-deposits. Stash will send small amounts of money to the linked bank account that you will use to transfer money in and out of Stash’s platform. If you successfully verify the amount that Stash sent to the bank account that you wish to link, the account verification process is successfully complete.
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:
- Stash Retire: With this feature, you can start in Traditional and Roth Individual Retirement Accounts (IRAs).4
- Fractional shares: This functionality allows you to purchase a small fractional share of an individual stock.
- Smart-Stash: This functionality analyzes your income and spending patterns from an external bank account to determine when you have money to spare. Afterward, it automatically saves little amounts of extra cash into your Stash account. You can also invest the money.
- Stash Coach: Stash offers personalized financial coaching tool that you can use to increase your investing knowledge
- Security: This investing app utilizes 256-bit bank-grade encryption to ensure the safety of your personal information. It also uses TLS layer security to protect your information when communicating with Stash.
- SIPC Coverage: The investments in your Stash account are covered by Securities Investor Protection Corporation (SIPC). While such registration does not imply a certain level of skill, it does require Stash to follow federal regulations that protect the investor. Investments are held by Apex Clearing Corporation, a third-party SEC registered broker-dealer and member FINRA/ 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. Apex Clearing is a member of the Securities Investor Protection Corporation (SIPC)6. This means your investments in your account are protected up to $500,000 total (including $250,000 for claims for cash). For details please see www.spic.org.
To note, for uninvested funds, a Stash account is enrolled in something called the Apex FDIC-insured Sweep Program. Deposits to the Sweep Program are covered by FDIC insurance up to $250,000 limit per customer at each FDIC-insured bank that participates in the Sweep Program. Once the cash is deposited with the participating banks under the Sweep Program, such cash will no longer be covered by SIPC.
STASH has three tiers of pricing depending on your needs and what’s important to you. STASH Beginner ($1/mo.)3 This plan is meant to help customers learn the basics of saving and investing with a personal brokerage account and access to banking services7, including Stock-BackⓇ rewards8. STASH Growth ($3/mo.)3 The Growth plan helps customers build the foundation of a healthy financial life and tacks on a retirement account in addition to the personal brokerage account and access to banking services, including Stock-BackⓇ rewards8. STASH+ ($9/mo.)3 STASH+ is the way to go as it helps you maximize the value of every dollar you make. You’ll get a personal brokerage account, retirement account, two custodial investment accounts5 for minors (UGMA/UTMA), a metal STASH Debit Card7 with 2x Stock-BackⓇ rewards8, and a monthly market insight report.
You won’t pay any commission for stock trades. 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. It also offers 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: $9 a month is a steal if you have a large balance. A $100,000 account would get $400 in charges with WealthSimple and only $108 with Stash.
- Low minimum deposit: Stash allows you to open an account and start investing with any dollar amount.
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 fee may be high for small accounts 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 don’t need a lot to start investing. That makes Stash one of our ideal investment apps for beginner investors.
The fact that one can diversify their portfolio 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.
1 Before investing in any exchange-traded fund, consider your investment objectives, risks, charges, and expenses.
2 For Securities priced over $1,000, purchase of fractional shares starts at $0.05.
3 You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
4 Stash does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction, or if a reduced contribution limit applies to a customer. These are based on a customer’s individual circumstances. You should consult with a tax advisor.
5 The adult (or Custodian) who opens the account can manage the money and investments until the minor reaches the “age of majority.” That age is usually 18 or 21, depending on the Custodian’s state. The money in a custodial account is the property of the minor. Money in a custodial account can be used by the parent or legal guardian, but only to do things that benefit the child.
6 To note, SIPC coverage does not insure against the potential loss of market value.
7 Debit Account Services provided by and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value. In order for a user to be eligible for a Stash debit account, they must also have opened a taxable brokerage account on Stash. Account opening of the debit account is subject to Green Dot Bank approval.
8 Stash Stock-BackⓇ is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A., or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.
Good Financial Cents is a paid solicitor of Stash. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. Investing involves risk and investments may lose value.