You’re new to invest, and don’t know where to start? You may be a little seasoned but still want guidance to determine exactly where–and how–to invest your money. Okay, Stash is a guidance network that just wants to help you do that. Stash not only helps you to invest in small amounts and buy fractional shares, but also provides you with a variety of interesting portfolios and assets you can purchase.
In reality, Stash has more options to offer than many investment firms. Here’s our full review of the Stash Invest.
Stash, which was launched in 2015, is an all-digital financial services offering aimed squarely at younger investors to help them spend, save and invest wisely. It has a user-friendly interface, and is more focused on saving and spending than on savings. It offers what are called buy-back transactions which allow you to earn stock shares or ETFs when you make purchases with a debit card from Stash.
Stash is an app that aims to make investing in the investment world simple and enjoyable for anyone, even if you’re brand new. It will not administer your accounts for you, but it will direct you through the process of selecting the right investment to match your particular needs.
Once you sign up online, you’ll be asked by the app to answer some questions about yourself. These are designed to provide the app with an idea of your financial situation, your investment and life outlook, and your future plans. The app will then curate a customized portfolio to choose from, giving you investment options that match not just your income but your values and goals as well. Signing up for Stash includes a free $5 bonus for a limited period of time.
Stash also serves to educate and direct its users, offering loads of educational in-app content. Of course, even this content is tailored to your own investment profile so you can easily access topics that really apply to you and your situation.
Even if you’ve never invested a penny before, Stash wants to make sure that you are comfortable and confident in your new portfolio choices. This app couldn’t be easier to use.
Pros and Cons of Stash
Low account minimum
Debit account with “Stock-Back”
Excellent educational resources
Automatic savings and investment tools
Plenty of investment options
Low fees on larger accounts
No tax-loss harvesting
No dividend reinvestment (taxable accounts)
Debit account doesn’t earn interest
No automatic rebalancing
Hands-off investors, who require advice and assistance
Investors who want to invest in specific industry groups/sectors
Who Uses Stash?
Stash’s target population includes inexperienced investors, beginners and passive investors.
Beginners and passive investors
Stash’s simple investment philosophy of investing based on value and themes is simplified by giving a widely understandable name to its portfolio/ETFs.
Investors with limited funds
The $5 required minimum initial investment helps those with financial limitations take the plunge into the financial markets.
Stash Investment Account
A Stash Investment Account is another type of account you can easily set up on Stash. It allows you to invest in Stocks, ETFs, and Bonds with as little as $5.00 through what are known as fractional shares.
Stash offers three main subscription plans that can be set up depending on your financial goals.
Let’s quickly go through each one and see what they offer.
The beginner plan is for those who are just starting out – and want to invest in the simplest possible way as well as learn the basics of investing.
With the Beginner plan, you get a personal investment account, debit account access, Stock-Back Rewards, and free educational content, helping you learn as you go.
The Beginner plan costs $1 a month.
This plan is for those looking to build a more stable foundation for their financial life.
You get a personal investment account with tax benefits for retirement investing, debit card access, Stock-Back Rewards as well as free financial education.
The Growth plan costs $3 a month.
Stash+, finally, there’s Stash+! You can use this plan to grow your financial power.
You get all of what the Growth plan has to offer plus investing accounts for two kids, a metal debit card with 2x Stock-Back rewards, as well as monthly market insights reports.
The Stash+ plan costs $9 a month.
How Does Stash Invest Work?
Stash Invest is a micro-investing and banking app that is mainly utilized via a mobile phone app for iOS or Android. You can start investing with as little as $5.
Anyone can open an account, you just have to be 18 years old, and live in the United States. Opening an account with Stash Invest should only take a few minutes, and if you do it now they currently have a bonus offer. You’ll get a $5 account bonus for signing up, which is enough to start investing.
To get started, you will need to answer a series of questions and provide your Social Security number, and then link an external bank account. Based on your level of acceptable risk (conservative, moderate or aggressive) you’ll be given recommendations for portfolios.
Stash Online Banking
Stash has an optional online banking account and Visa debit card that you can sign up for with your account. Some of the features of the account include:
Early payday (Get paid up to 2 days early)
No overdraft fees.
No monthly maintenance fees.
Access to thousands of fee-free ATMs.
No minimum balance fees.
Stock-Back®Rewards for everyday spending.
Setup automatic transfers to keep the account funded.
This account is included in the regular monthly fee, and doesn’t have additional fees.
Stash Stock-Back® Rewards
Stash introduced a cool feature a while back that they call “Stash Stock-Back® Rewards” . It’s a rewards program of sorts that works in conjunction with your Stash debit card and your online banking. Instead of getting cash back, however, you’re getting fractional shares of stock where eligible.
Here’s how it works. Make a purchase with your Stash Visa at any of 11 million businesses nationwide, and you’ll get rewards for that purchase in the form of a fractional share of stock for that company (or for a diversified ETF index fund if that company isn’t available). For example, if you buy something on Amazon with your Stash debit card, you’ll earn AMZN Stock-Back® as a reward.
As soon as you make a purchase using your Stash debit card, you should get a notification of the stock that you’ve earned. You’ll earn 0.125% Stock-Back® rewards on everyday purchases, and up to $5 Stock-Back® rewards at certain merchants. The stock will be added to your taxable brokerage account within your app.
Other Features of Stash Invest
Here are some other important features and functionality of the app that are important to know about.
Stash Retire: Stash recently has moved into the retirement investing space and they now offer Traditional and Roth IRA accounts. Those accounts have a minimum of $15 to invest.
Smart-Save: Smart-Save functionality studies your spending and income patterns to figure out when you have cash to spare. Then it automatically saves small amounts of extra cash into your Stash account. There, it earns interest, or can be invested.
ASAP Direct Deposit: Get paid up to 2 days early.
Automated investments: Set up a regular deposit and fund your account on an automated basis.
Fractional shares: You can buy fractional shares – buying a small fractional share of a single stock.
Educational materials: They have a decent array of educational materials available for newer investors in both the app, via email, and on their website.
Tools to forecast: The app has a tool to see the impact your saving and investing might have over time. It gives you insight into how your positive choices are impacting your future.
Security:Stash’s app uses 256-bit bank grade encryption to secure your personal information. Information sent between the app and their servers use SSL encryption, and they don’t store you your bank long information.
SIPC Coverage: Your investments in your account are covered by Securities Investor Protection Corporation (SIPC) through the clearing agency used by Stash, Apex Clearing Corp. The limit of SIPC protection at any brokerage is $500,000, which includes a $250,000 limit for cash.
Stash Invest Service Fees and Minimums
Where the rubber meets the road is just how much you’ll be paying to use Stash Invest. What are the fees and minimums for using the service?
First of all, there is a $5 minimum in order to have an account, and you only need $5 to invest. So the service is accessible to just about everyone, especially if you get the $5 bonus mentioned above.
Low Monthly Fees
The service offers three monthly subscription plans. There is the Stash Beginner account for $1/month that includes a personal investment account, debit Visa card account access, Stock-Back® rewards program that helps you to earn stock for your normal spending, and free financial education. The $3/month Growth subscription will give you everything in the basic account, but also includes access to retirement accounts.
The $9/month plan gives you everything in the above plans but adds in the option of custodial accounts where you can start investing for 2 kids, a metal debit card that also gives you 2x earnings on Stock-Back® rewards, as well as monthly market insights reports.
While $1/month isn’t really that much, the one caveat is that if you have a low balance account and you’re paying $1/month for the service, that fee could be a relatively large percentage of your assets in comparison to some other services. It might be something to consider. Stash becomes more cost effective in my opinion once your account reaches a higher dollar value, and at that point it’s very comparable to other investment sites like Betterment, Wealthfront and others.
Set Regular Investments with Auto-Stash
Part of Stash’s investment philosophy is that you need to invest on a regular basis, and this is easier if you automate the process. Auto-Stash gives you three different ways to routinely invest: Set Schedule, Round-Ups, and Smart-Stash.
You pick how much you want to transfer into your Stash account from your funding source. Stash will save this as part of your cash balance, and then you can pick individual investments or set your account to automatically purchase them.
Stash will round-up transactions from a connected debit card to the next dollar amount and invest the difference. This has become a popular feature among micro investing apps, and it works on the premise that your spare change really will add up.
Here’s an example: spend $4.37 on a latte, Stash will round that up to $5, and transfer the $0.63 difference into your Stash account. You can pick how to invest your Round-Ups once you hit $5.
This feature analyzes transactions from your linked debit card to find out how much money you can spare to invest each month. Smart-Stash then transfers that amount into your Stash Invest cash balance.
You can set a maximum transfer amount for Smart-Stash — $5, $10, or $25. Stash will not transfer more than this amount.
How to Get Started
If you want to get started with Stash Invest, the sign-up process is extremely simple. (After you sign up, check the bottom of the post for ways to quickly grow that balance.)
Next, you’ll fill out your basic information and answer a couple of questions.
These questions will help Stash guide you on making investment decisions. It’s important that you’re honest with these survey questions because they help determine your risk tolerance.
This should only take a couple of minutes.
3. Choose an Investment
Based on the answers you provided, Stash Invest will show you investment options that line up with your risk tolerance (conservative, moderate, or aggressive.) You can click on the different investments to learn more about them. (Don’t worry they’re explained in layman’s terms!)
The great thing about Stash is that they make investing relatable. Instead of crazy names of ETFs and ticker symbols, you invest in “themes” that are based on your wants, beliefs, or likes. We’ll talk more about that below.
4. Link Your Bank Account
Link up the bank account you want to have money withdrawn from to make your investments.
It takes about 2-3 days for the money to transfer into Stash.
5. Confirm Your Identity
Verify your identity, create a four digit pin number and you’re all done.
Is Stash Legitimate?
If you’re still not sure whether Stash is legitimate, the short answer is yes. Stash is a legitimate financial solution, registered with the US SEC and FDIC insured (more on that later). The company has been in business since 2015 and has since then experienced encouraging growth.
It has also been recognized by The Wall Street Journal as one of the tech companies to watch in 2018, as well as a few other awards recognizing Stash as a leader in what they do.
What Are Fractional Shares?
Shares can be quite pricey things to buy, putting them out of most people’s reach. Fractional shares, on the other hand, make investing quite affordable for everyone. When talking about fractional shares, what essentially happens is that a broker; Stash, in this case, allows you to buy a percentage of that share, thereby making it more affordable.
You can also buy ETFs about causes that are close to your heart, such as social media, green energy, and gender equality. There are over 60 different ETFs to choose from.
What are ETFs?
ETF, which stands for Exchange Traded Fund, is a collection of different investments put together as one investment.
ETFs are usually constructed in such a way as to track the performance of an underlying index ex-S&P 500. Stash has several EFTs available to invest in that are way more user-friendly than indices.
Is Investing With Stash a Good Idea?
If you’re looking at taking the next step towards financial freedom, investing is always a good idea. There is a caveat here that needs to be mentioned; investing is always a good idea, as long as you understand what you’re investing in.
This is what makes investing with Stash a good – or even great idea: their financial education system is just brilliant at helping you understand what you’re investing in and how you should invest your money to see a healthy return.
Of course, investing is always a risk – but understanding that risk goes a long way in making sure you are investing with your head and not over it.
Is Stash a Safe App?
When you decide to invest your money, it’s absolutely crucial to make sure you go for a company that’ll keep your money safe. And what about Stash? You have nothing to worry about – the company takes all necessary security precautions to ensure the Stash app and your account are as secure as possible. All Stash accounts need a user ID, a password, and a pin to log in successfully.
Furthermore, you can also use your phone’s biometric sensors such as fingerprint readers, to enhance the security of your account further. All data is encrypted using 256K bit encryption, which is one of the most secure encryption methods available today. The application also uses TLS to ensure all communication between you and the server is protected.
It is also worth mentioning here that Stash is PCI-DSS (Payment Card Industry Data Security Standard) compliant, which makes it as safe and reliable as they come.
Is Stash FDIC Insured?
Not only is Stash registered with the US SEC (Securities and Exchange Commission), but your account is also FDIC insured. Investments with Stash are protected up to $500,000 ($250,000 of which are for cash).
So, now that you have more information about Stash, could this be the right investment app for you? What I like most about Stash is that it makes it easier to save, and open to everyone. Saving and investing are not the easiest things to do when you don’t have a lot of money to spare or years of experience investing first hand.
But whether it is retirement money, the emergency fund or anything in between –stable finances are key to a healthy life. That’s why Stash can (literally) be such a valuable financial tool in your wallet. Stash is not only a legit investing app–it’s also an excellent way to save and expand your wealth. You should start growing your pot while learning about the ins and outs of investing, taught to you in simple and fun ways.
Stash helps you stay interested in how your money is invested and how it develops, and might help alleviate the worries that many new investors have–such as not understanding the language, or worrying that they don’t have enough money to start. With Stash you can kick start your investment journey with as little as $5.
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