Stash Invest Review 2019

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Are you looking for an easy way to invest a small amount of money?

Your only investing option isn’t using a broker that requires you to invest hundreds or thousands of dollars at a time.

Stash Invest helps new and experienced investors invest in stocks and ETFs with as little as $5 per trade. This Stash Invest review will help you decide if this is the best investing app for your money.

If you don’t have more than $100 dollars to invest, this app may not be worth it to you. Instead, consider using one of these free investing apps. Toward the bottom of this review, we have summarized a few alternatives to Stash app.

3.75

Summary

Stash Invest makes it easy to start investing with only $5. You can invest in individual stocks, index ETFs and thematic ETFs. This isn’t a good option if you don’t want to pay a monthly account fee or need a “hands-off” managed account.

How Does Stash Invest Work?

Stash Invest is a micro-investing app offering taxable and retirement investment accounts. It’s possible to invest as little as $5 per trade and buy fractional shares of your favorite company stocks and ETFs.

Besides stocks and index ETFs, Stash also offers thematic ETFs that focus on certain market sectors and social values. Some thematic ETF examples include cybersecurity, clean energy and socially responsible businesses.  

You can also open a fee-free online checking account with a Stash-issued debit card that invests your spending roundups.

There are three different ways to fund your Stash investing account:

  • One-time or recurring checking account contributions
  • Rounding up debit card purchases to the next dollar with a Stash-issued debit card
  • Cash rewards from online purchases

No matter how you fund your account, Stash invests your cash balance when it reaches $5.

Unlike robo-advisors that automatically choose your investments, Stash requires you to pick which ETFs and stocks to invest in. Stash offers a wide library of learning resources that help teach investors on how to become successful.

To be clear, you will need to invest more than your spare change to save for retirement. You will need to eventually invest hundreds of dollars each month into a 401k to achieve your long-term financial goals. Micro-investing apps like Stash are a good way to either start investing as these small amounts help increase your net worth.

Fractional Investing

Possibly the most notable difference between micro-investing apps like Stash and traditional brokerages like Vanguard and Fidelity is fractional investing.

Most online brokerages require you to buy full shares of individual stocks and ETFs. For example, let’s imagine you want to buy a single share of Amazon stock that costs $1800. Many brokers require you to have the full $1800 to buy each share. Stash lets you buy a partial share when you can’t invest the full amount, even if you can only invest $5 at a time.

Fractional investing makes it easier to maintain a diversified portfolio when you only invest a few dollars at a time. Buying partial shares also means you can invest regularly to begin earning passive income that can exceed how much you earn by earning bank account interest until you can afford to invest.

For transparency, brokerages like Vanguard and Fidelity offer fractional investing with index mutual funds. But you may need to meet the relatively high investment minimums to buy shares.

As an example, Vanguard may require a $3000 minimum initial investment. Recurring investments can then be made in $1 increments after you open a position.

Account Types

Stash offers taxable accounts for adults. Parents can open taxable custodial accounts for their children. It’s also possible to open Traditional IRA and Roth IRA retirement accounts.

Costs

Stash offers unlimited monthly trades. You pay a flat monthly account fee of $1, $2 or $3 until your account balance reaches $5000 when you pay a 0.25% annual fee instead:

  • Taxable account only: $1 per month
  • Retirement account only: $2 per month ($0 for customers under age 25)
  • Taxable and retirement account: $3 per month
  • Online checking account and debit card: Included with any investing plan

Taxable custodial accounts for children under 18 cost $1 per month. Stash doesn’t charge a fee to open an online checking account. Their debit card also offers free withdrawals at over 19,000 ATMs.

You will also need to pay any ETF fund expenses in your portfolio. Every investor pays these fund fees regardless of which investing app you use.

These fees can be cheaper than using an online broker that charges $4.95 to $7 per trade for each stock or ETF ticker symbol you buy or sell. However, the monthly fee can still be expensive if you only invest a few dollars each month because it’s more difficult for your investment gains to be higher than your account fees.

Also, if you can meet the investment minimums for commission-free ETFs and mutual funds, it’s possible to invest in the same funds at another broker and avoid the monthly account fee.

Investment Options

The Stash investment options may be the deciding factor for most people. Stash is a self-directed investing app where you choose what to invest in. If you want a fully automated investing app that picks your investments for you, Stash isn’t a good option.

You have three different investment options:

  • Individual stocks: Directly investing in specific companies like Amazon or Nike
  • Index ETF: A fund that holds multiple companies in a market index like the S&P 500
  • Thematic ETFs: A fund that invests in a specific market sector like healthcare or banking. Thematic ETFs may also invest in companies with a common vision such as minimizing carbon footprints or gender diversity

You may like Stash because you also have the option to invest in individual stocks and thematic ETFs in the same portfolio where you hold index ETFs. Having all your investments in one place makes it easier to maintain a diversified portfolio. One downside to investing in individual stocks and thematic ETFs is these two products are more volatile than index ETFs.

Regardless of which ETFs or stocks you invest in, Stash fills all buy and sell orders in their morning and afternoon trading windows.

Index ETFs

Stash offers several stock and bond index ETFs from iShares and Vanguard that track the broad market like the S&P 500, emerging markets, and developed global markets. You may choose to invest in index ETFs first to instantly attain a diversified portfolio.

Individual Stocks

It’s possible to invest in approximately 180 widely-known companies like Amazon, Walmart and ExxonMobil. You can also invest in newer companies including Spotify and Lyft which only became publicly-traded in 2018 and 2019, respectively.

Stash doesn’t have a wide stock selection but it’s a good way to supplement your ETF holdings.

Thematic ETFs

The third investment option is thematic ETFs. These ETFs either focus on a certain market sector or companies that might certain environment, social and governance standards. All of these ETFs are available on other brokerages although they may require you to buy full shares.

A few quick examples of thematic ETFs Stash offers include:

  • Do The Right Thing (ETF Symbol: SUSA) Invests in 250 companies with high environmental, social and governance scores
  • Gamers FTW (ETF Symbol: GAMR) Holds stocks of companies that create or use video games from around the world
  • Women Who Lead (ETF Symbol: SHE) Invests in companies with women in high-level leadership roles
  • Young Money (ETF Symbol: MILN) Focuses on companies that Millennials use

Of the approximate 60 ETFs that Stash offers, most of them are thematic ETFs.

Banking

Stash also offers a free FDIC-insured online checking account and debit card with any investment account. This can be a good option if you want to keep your cash and investments at one place. You also have access to 19,000 fee-free ATMs.

Stock-Back Spending Roundups

One way Stash makes investing easy is with their “Stock-Back” spending roundups. You will need a Stash debit account if you want to invest using spending roundups.

For instance, Stash deducts $5 from your account when you make a $4.60 purchase and invests the extra 40 cents in the company stock you made the purchase at. Amazon purchases mean you get Amazon stock, Apple purchases yield Apple stock but a purchase at a local restaurant will invest your roundup into an index ETF.

That index ETF is the Vanguard Total World Stock ETF (ETF Symbol: VT). This ETF is an index fund that invests in the U.S. and global companies with a low 0.09% annual expense ratio.

At this time, Stash only rounds up purchases from the Stash-issued debit card. You will need to use Acorns if you want to invest spending roundups from your current credit or debit card. Another reason to consider the Acorns spending roundups is that the entire amount invests in index ETFs and not individual stocks.   

Invest Cash Back Rewards

The Stash Cash Back Rewards program is similar to cashback sites you may already use. But it’s one way you can get free money to invest. You don’t need a Stash debit account or round up your purchase amounts.

Start earning cash rewards by linking your current debit and credit cards to your Stash investment account. Next, activate shopping offers for online and in-person retailers and pay with your link card to earn up to 10% cash rewards. Your cash rewards balance deposits into your investing account monthly.

This banking option is free and more flexible because you get to choose how to invest your cash rewards. It can also be a “free” way to cover your monthly account fee.

Tip: If you don’t want to invest your cash rewards, use a shopping app like Ebates instead. You get a $10 cash bonus after making your first $25 purchase.

Education

Stash mentions that 85% of their members are beginner investors. Their “Stash Learn” resources include articles, guides and podcasts that help inexperienced investors learn how to invest. The interactive “Stash Coach” tool that helps walk you through the account setup process to help you make your first investment.

Stash Learn

Most articles take five minutes or less to read and cover basic investing and money management topics.

All of the educational content focuses on these three investing principles:

  • Invest for the long-term
  • Invest regularly
  • Diversify

During the onboarding process, Stash will ask you a variety of questions to help determine your investing goals. Stash will then provide curated articles and investment suggestions that can help you become a better investor.

Stash Coach

Most online brokerages offer basic educational content similar to the Stash Learn platform. What makes Stash different than other investing apps is their interactive Stash Coach tool.

Stash Coach uses goals and weekly challenges to help you learn about investing and develop investing habits. DIY investing can feel intimidating because you new investors may not know what to do after opening an account. Although Stash doesn’t tell you what to invest in, Stash Coach can help you explore potential investing themes that help you gain exposure to the various market sectors.

Pros

  • Can buy fractional shares of stocks and ETFs
  • Unlimited monthly trades for one flat fee
  • Only need $5 to start investing
  • Taxable, retirement and custodian accounts available
  • Spending roundups and shopping cash rewards are investable

Stash Invest can be a good option when you are comfortable picking your own investments.

The fractional investing makes investing affordable when you might only be able to invest $100 or less at a time.  There is a sufficient selection of index ETFs that give you exposure to domestic and international broad markets. Access to stocks and thematic ETFs is a nice addition too.

Paying a flat monthly fee can save you money on trade fees. Other online brokers charge a trade fee between $0.99 and $7 per trade for individual stocks and ETFs. Only having to pay between $1 and $3 per month for unlimited trades lets you invest more of your cash.

Cons

  • The monthly fee can be relatively high with a small investing balance
  • Some investors may want more index ETF options
  • No managed “robo-advisor” accounts
  • Trades only execute during the morning and afternoon trading windows
  • Need Stash debit card to enroll in spending roundups   

Investors who don’t have the time or desire to manage their own investment accounts will benefit more from a robo-advisor that automatically chooses your investment mix and rebalances your portfolio for you. Stash uses iShares and Vanguard index ETFs like most robo-advisors so you can invest in the same funds with another investing app and exert less effort.

Experienced investors may also dislike the relative lack of investment options. Most investors will be pleased with the available stocks and ETFs. But if you want to invest in relatively unknown companies or different thematic ETFs, your only option is to use a different broker.

Stash Invest Reviews from Actual Stashers

Are you still wanting to know more about Stash Invest?

Two actual Stash users share their investing experiences below:

Andrew Herrig recommends Stash for beginner investors stating, “Stash is a good option for someone just getting started with investing and needs guidance on how to allocate their portfolio and help in determining their risk tolerance.”

He now uses his investing knowledge to invest in index funds at a traditional brokerage that doesn’t charge a monthly fee.

Kristin Stones has been using Stash for two years and appreciates the simplicity of being able to invest small dollar amounts at a time. Investing her small change prevents Kristin from making frivolous purchases.

She invests in both ETFs and individual stocks with Stash. Because she only needs to invest $5 at a time, she is able to gain investing experience without risking large amounts of money.

In both cases, Andrew and Kristin both acknowledge can be a good way to start investing when you have minimal knowledge and money. As your portfolio grows in value, switching to a regular brokerage can be cheaper because you don’t pay monthly account fees or index funds with lower management fees.

You may also consider using Stash as a secondary investing account. Your employer-sponsored 401k or a similar retirement plan might be your primary investment account. Stash can be an affordable way to use your spare change to earn passive income. Perhaps you may use this cash to invest in riskier stocks and thematic ETFs that you don’t want to hold large positions in.  

Alternatives to Stash Invest

Stash Invest is a legit investing app but it’s not the best option for every investor. You might prefer these options instead.

Acorns

Acorns is the most identical alternative. You can make new investments in $5 increments. They offer taxable and retirement accounts, fee-free checking and spending roundups with a flat $1, $2 or $3 monthly fee for all account sizes. The two main differences are Acorns only offers index ETFs and they automatically manage your portfolio.     

Betterment

Investors wanting a fully-automated investing experience may like Betterment. You only need $1 to start investing in a basket of stock and bond index ETFs. Betterment handles the entire investing process and automatically rebalances your portfolio. The entry-level Digital plan costs 0.25% annually.

Read our Betterment review to learn about how this robo-advisor works.  

M1 Finance

Are you ready for a 100% free investing app? M1 Finance doesn’t charge trade fees or account management fees. You only pay fund fees for any ETFs you invest in. It’s possible to invest in almost every individual stock and ETF that trades on the U.S. stock exchanges. Like Stash Invest, M1 Finance lets you trade fractional shares.

One downside compared to Stash Invest is that you need at least $100 to open a taxable account and a $500 initial deposit for retirement accounts.

Our in-depth M1 Finance review will help you decide which investing app is better.

Stockpile

Stockpile can be a better option if you don’t make new investments each month as you don’t pay a monthly account fee. This is because Stockpile charges 99 cents per trade for each stock or ETF you buy instead. If you make at least two trades per month, Stash Invest is cheaper assuming you pay $1 a month. Like Stash, you only need $5 to open an account.

Summary

One of the best investing habits you can practice is investing small amounts of money on a routine basis. Both beginner and experienced investors can appreciate Stash Invest’s low monthly fees and only needing $5 to invest.

Investors who prefer having a managed account or who can afford to buy whole shares of stocks and ETFs may prefer to use another broker that provides more flexibility.

Are you going to invest your cash with Stash Invest? Why or why not? Please share your thoughts.


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