Content of the material
- Company Overview
- How to withdraw money from Stash
- How Does Stash Invest Work?
- Single Stock Investing
- Stash Banking Account
- Cons: Where Stash could improve
- Basic managed portfolio and lack of clarity on investments
- No automated ESG portfolio choices
- Limited account types
- Stashs competitors
- How Does Stash Compare?
- How does Stash work?
- Stash Pros and Cons
- How much can you earn with Stash?
- Distinguishing Features
- Investment Options
- Fractional shares
- Are managed portfolios available?
- What Does It Offer?
- Stash vs Acorns
- Research and Investing Tools
How to withdraw money from Stash
When you sell an investment through Stash, that money will appear in your Stash account approximately 48 hours later. You can then transfer it to a linked bank account by logging into Stash via mobile or desktop and selecting the Transfer option. Next, you specify where you’d like to transfer funds and the total transfer amount. After that, simply click Continue (in the app) or Confirm (on the website) and Make Transfer. You should see the funds in your bank account shortly afterward.
- Automatic savings and investing tools
- Offers fractional shares
- Earn bonus stocks through debit card purchases
- Low minimum investment requirement
- Educational content included with the app
How Does Stash Invest Work?
Stash helps beginner investors ease into the investment journey with a combination of automated investing tools, financial education and access to advisors, and good old fashioned budgeting fundamentals. While other investment apps require higher minimum deposits, Stash makes it easy to invest in smaller increments while still getting a piece of large recognizable companies through fractional shares.
When you open an account, you’ll be given a questionnaire to fill out which can help Stash determine your risk level and offer investment options. From there, you link a bank account, set your auto-deposit frequency and start rolling.
In addition to the basic investment tools, Stash also offers a bank account with its own suite of features which can help you keep tucking money away.
Single Stock Investing
With Stash you can invest in select single stocks and ETFs. To read about a company’s fundamentals and select an individual stock, select the “Companies” tab in the app.
Currently, there are over 1,800 stocks and ETFs that you can invest in.
Stash Banking Account
Stash has a bank account with their version of a cashback card called the Stash Stock-Back® Card. This card is issued by Green Dot Bank. There’s no minimum balance required to open and maintain a Stash banking account (however, you must deposit at least $1.00 to the bank account balance to receive your account). This account also has no hidden banking fees—no overdraft fees, either.
Your Stash debit card can be used to withdraw cash from Green Dot Bank-associated ATMs. You can also deposit cash into the bank account by opting into direct deposit, transfer cash from an external bank account, or deposit cash at any participating retailers, including CVS Pharmacy®, Walgreens, Rite Aid, and Walmart for a fee up to $4.95 using your Stash debit card.
Here are some of the features of a Stash banking account:
- Stash Stock-Back® Card: When you use your Stash Stock-Back® Card at a retailer on Stash’s investing platform (such as Walmart, Starbucks, Netflix and Amazon), you can earn a percentage of your purchase back as a fractional share of that company. If you use your Stock-Back® Card anywhere else, you can earn a percentage of a stock or ETF of your choosing.
- Recurring Transfers: This lets you automatically transfer money from your external linked bank account to your Stash banking account.
- ASAP Direct Deposit: When you set up your paychecks to directly deposit into your bank account on Stash, it can hit your account up to two days earlier than it may hit with another bank account.
- Round-Ups: With Round-Ups, your savings are put on auto-pilot. Stash will round up the purchase price to the nearest dollar every time you spend money. Once the round-up total hits $5, Stash will then transfer that spare change to your personal investment account.
Cons: Where Stash could improve
Like a few rivals (including Acorns and Ellevest), Stash offers managed portfolios for a monthly fee. While Stash’s monthly fee ($1, $3, $9) is not high in an absolute sense, it may be quite pricey when judged by the standards of the rest of the industry. The industry generally prices on how much you have invested with the company, that is, your assets under management.
For example, with just $1,000 in your account and using Stash’s entry-level tier at $1 per month, you’re paying $12 per year or 1.2 percent. That compares to an industry standard of 0.25 percent, or about $2.50 for every $1,000 invested. That’s not a lot of money in the aggregate, certainly, but if you’re working with a smaller portfolio, every dollar counts.
That said, the fixed-cost model can prove remarkably attractive if you’re bringing significant money to the robo-advisor, since your assets go up but your fees don’t.
However, if cost is your key objective, you might have a look at SoFi Automated Investing, which charges no management fees or Schwab Intelligent Portfolios, which also lets you duck the management fees, though you’ll have to cough up $5,000 to meet their account minimum.
Basic managed portfolio and lack of clarity on investments
The Stash managed portfolio is the most basic portfolio in this space, with just three preset investment options – a conservative, a medium and an aggressive portfolio. As mentioned above, these portfolios are constructed using just a handful of ETFs, the details of which are a bit difficult to determine unless you actually sign up for an account.
While this portfolio approach is vanilla in its sophistication, it should work acceptably. So much in investing is unnecessarily complex, though sometimes complexity does provide extra juice.
Stash does not offer any kind of tax strategy, though it does automatically rebalance your portfolio at the end of each quarter if you move more than 5 percent from your target allocations.
A more well-developed portfolio process would likely generate high returns here.
No automated ESG portfolio choices
With just three portfolio options ranging from conservative to aggressive, Stash lacks the choices offered by other robo-advisors. Its rival Acorns now offers 22 ETFs within their automated portfolio choices, including some focused on environmental, social and governance (ESG) issues, which can be popular with younger investors.
Stash chose to include cryptocurrency funds in its portfolios before offering investors fund options beyond the basics. Crypto is an innovation that may benefit investors, but Stash could improve its portfolios by adding funds in more traditional asset classes first.
Limited account types
Stash has a relatively limited selection, with a bit of a strange twist. It allows individual taxable accounts, but not joint. It also offers the typical traditional IRA and Roth IRA, for those in the middle and upper service tiers. The twist: It also offers custodial accounts in its upper tier.
Custodial accounts are a little bit unusual in robo-advisor accounts, with close rival Acorns also offering them. But Acorns allows you to access them at a lower price point than Stash does. That said, Stash’s upper tier also brings some other perks to the table, as discussed above.
Acorns is another investing app that will allow you to get started with as little as $5.
Like Stash, it will take your personal investing goals and investment comfort levels into account. You can have Acorns round up any spare change from your purchases and add that to your investment portfolio. Or simply invest lump sum amounts when you have them.
How Does Stash Compare?
The biggest drawback of Stash is the cost. While $1 per month ($12 per year) may not seem like a lot, but with a small portfolio, the percentage is very high. On a $100 investment that is 12% in investing fees.
And, remember, that’s for an account that doesn’t include access to Smart Portfolios. In other words, you’re paying $12 per month for a self-directed trading account. Self-directed accounts are available at no cost at virtually all full-service stock brokers. For this reason, I find it hard to recommend the Stash Beginner plan.
Even when you add robo-advisor service ($3/mo to $9/mo), Stash’s pricing can still be high for smaller accounts when compared to robo-advisor platforms that use an AUM (assets under management) pricing model. Betterment, for example, charges 0.25% for its Digital Plan. So for a $1,000 account, you’d pay $2.50 per year with Betterment while you’d pay $36 per year for Stash Growth.
Still, some new investors may be willing to pay more to learn how to invest and form the investing habit.
However, Stash’s flat-fee pricing model becomes more favorable as your account size grows. For example, at a $25,000 account balance, you’d pay Betterment $50 per year, but you’d still be paying $36 per year with Stash Growth. Here’s a closer look at how Stash compares:
How does Stash work?
If you are interested in using Stash, you can sign-up by visiting their website or downloading the app, available for both iOS and Android.
First, you’ll be asked to set up an account by creating a password and sharing your email. Next you’ll be asked to share some information about yourself.
Although it might seem like several steps, it only took a few minutes to go through this informational process.
You’ll be asked to provide your legal name and date of birth. In order to work with Stash, you need to be 18 years old. Plus, you must prove that you are a U.S. citizen through your Social Security Number.
All of this will be done in the “Basics” part of the process.
After you verify your identity, you’ll be asked to pick a plan. Although the first month is free, you’ll be charged for the plan you choose after the first month.
You’ll then be asked to complete a questionnaire. The goal of the questionnaire is to determine your risk tolerance for your future investments.
The risk levels are conservative, moderate, and aggressive. After you are placed into the best category for your financial situation and personal preferences, you will receive a selection of recommended investments.
Stash provides a wide range of investment options in order for you to build the best portfolio for your situation. You’ll find roughly 1800 individual stocks and ETFs, as well as many bonds as options through your Stash account. Many stocks span a broad range of companies covering all parts of the U.S. economy, from big household names to smaller manufacturers.
Once you’ve established a risk level and fund your account, then you’ll be able to start investing. It may take a few minutes to enter your banking information in order to fund your investments.
Stash Pros and Cons
- More Investment Options – Stash gives you the option to invest in many investment themes from among thousands of ETFs and individual stocks.
- Education – Stash makes sure that you learn to invest with confidence by providing information on all the basics.
- No minimum deposit – You can open a personal portfolio account and start investing with as little as $1; there’s no account minimum required.
- Stock-Back® Card – With a Stock-Back® Card you can earn fractional shares in retailers and ETFs when you use your issued card.
How much can you earn with Stash?
The amount you earn with Stash is going to depend completely on you. The more you invest and the better your investments do, the more you can earn. As a reminder, investing involves risk. There are no guarantees and while your investments have an opportunity to gain value over time, they also may lose value.
Stash indicates that its users save an average of $1,4329 per year by using the company’s tools. If you invested that money every in a tax-deferred account and your investments earned a 7% annual return over 30 years, you could end up with over $135,000 saved. Of course, you could also end up with similar savings from any online brokerage account or robo-advisor, assuming you made the same investment and earned a similar return.
Another perk of using Stash is the Stash Stock-Back program, which rewards users as they spend money. All qualifying purchases made with your Stash debit card earn a percentage back in stock. If you make purchases at retailers within Stash’s investing platform, you’ll automatically earn a percentage back of that company’s stock. For other purchases, you’ll get a percentage back in a Stash-approved ETF.
Stash Invest sticks with the basics for investing. You can build a portfolio using stocks or exchange-traded funds.
An exchange-traded fund is like a cross between a mutual fund and a stock. It includes different securities the way a mutual fund does. But it trades on an exchange like a stock.
Either option could be great if you’re a beginning investor. And ETFs are great for investing because they tend to be cost- and tax-efficient.
But if you’re looking for more advanced options, like futures or forex, you’ll need to look elsewhere. Stash Invest doesn’t offer options trading or cryptocurrency either.
It’s also worth mentioning again that you can trade shares with Stash Invest fractionally.
Instead of buying a full share, you can buy partial shares in your favorite stocks.
That’s great if you want to own Apple or Google but you don’t have hundreds of dollars to plunk down on a single share. Instead, you can buy fractional shares of top companies starting as low as $1 each.
This is a huge plus if you’re a beginning investor and you want to build a portfolio incrementally. And it’s something you won’t always find at other online brokerages.
Are managed portfolios available?
Managed portfolios are designed for the investor who’s looking for a professional touch.
A portfolio manager puts together a portfolio for you, based on your goals, risk tolerance and time horizon for investing.
You benefit from their expertise, which could translate to higher returns and better performance over time.
Stash Invest doesn’t offer traditional managed portfolios.
But, there is a tool you can use to create a portfolio that fits your needs.
If you sign up for the Portfolio Builder option, you’ll be given a portfolio that’s aggressive, moderate or conservative, based on the answers you share with Stash regarding your risk tolerance.
These portfolios are meant to be diversified to help you meet your goals. So if you’re not comfortable picking your own investments, the Portfolio Builder tool can do it for you.
What Does It Offer?
With a beginner account, Stash members can invest in thousands of individual stocks and ETFs. Or for a higher monthly fee, you can invest with a hands-off approach called Smart Portfolio. Here’s a closer look at what Stash has to offer.
Stash vs Acorns
Stash’s main competitor is Acorns, which also offers round-ups, recurring investments, and fractional share investing.
If you’re looking to do your banking and investing with the same company, Stash may not the cheapest investment app on the market, but is the cheaper of the two. It includes banking in its $1-per-month plan, while you must be an Acorns Personal customer ($3 per month) to open an Acorns Spend checking account.
If you’re only looking to invest (and do your banking elsewhere), Stash has the slight edge because it offers more flexibility. Stash account holders can invest in hundreds of individual stocks and ETFs. With Acorns, your investment choices are limited to five ETF portfolios.
If you’re looking to open a custodial account for your kids, Acorns will be the more affordable choice. Custodial accounts are included in the Acorns Family plan, which costs $5 per month. Stash, meanwhile, restricts custodial account access to subscribers on its $9-per-month month Stash+ plan.
Research and Investing Tools
If you’re investing for the first time, Stash offers a number of tools and resources to help you learn the ropes.
Those include tutorials and articles that cover the basics of investing and saving. There’s also a separate online investment academy to help kids learn the fundamentals of saving and investing.
You won’t find a lot of technical analysis tools here the way you can with other online brokerages. There are no stock tickers or algorithm tools you can use to track stock trends.
But that reflects the type of investor Stash is geared toward: people who want a streamlined way to trade stocks and ETFs.
If you’re looking for a few more bells and whistles then you may want to research other brokerage options.
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