Stash is an app that seeks to make investing simpler, less daunting, and more interesting. You may begin started with with a modest amount of money, add to your balance over time, and invest in industries and businesses you’re enthusiastic about.
A recent Bankrate study found that nearly one in five Americans don’t save anything. At all.
Most folks know they should be saving, but many struggle to get started. They don’t know how much they can afford to save, what type of account to save in, or where to invest.
When you invest, you risk losing part of your money. But you incur a risk by not investing, too. Money in your savings account loses value thanks of inflation, therefore investing is crucial to ensure sure you have ample money in the future.
Stash is an app that seeks to make investing easier, simpler, and more interesting. You may begin started with only $1 and grow to your balance over time. You may also select to invest in the sectors that you’re interested in, which provides you another motivation to keep up on your investments.
What is Stash?
Stash may be used as an app (for both iPhone and Android smartphones) or on a PC. It seeks to simplify investment and make it more transparent for the general customer.
The app was published in October of 2015 and it has grown swiftly in the last three years. Since its launch, Stash has accumulated more than 4 million clients and increased features for online banking, retirement, and custodial accounts.
Is Stash Secure?
Stash is a safe and dependable program. It has a 4.0 rating on Google Play Store with more than 99,000reviews and was named as one of “The Most Innovative Fintech Companies In 2019” by Forbes.
Stash utilizes 256k bit encryption, and users have to use a username, password, and PIN to log in. You may also require biometric/fingerprint access for your app for further protection.
Even if Stash goes bankrupt, your funds will remain secure and will still belong to you.
The investments in your Stash account are protected by the Securities Investor Protection Corporation (SIPC) (SIPC) (SIPC). This implies Stash has to meet government requirements that secure the investor. Investments are held by Apex Clearing Corporation, a third-party SEC registered broker-dealer and member FINRA/SIPC.5
SIPC protection covers up to $500,000 of any brokerage. This indicates the assets in your account are covered up to $500,000 total (including $250,000 for claims for cash). For additional information, consult the SIPC website.
For uninvested funds, a Stash account is enrolled in something called the Apex FDIC-insured Sweep Program. Deposits to the Sweep Program are protected 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 placed with the participating banks under the Sweep Program, the funds will no longer be protected by the SIPC.
Stash Investing Review: How It Works
Stash is an easy-to-use investing software suited for novices. Here’s what you receive when you establish a Stash account.
You’ll have to answer some questions to set up your investing account. First, Stash will inquire how much investment experience you have. Next, it will question what sort of investor you consider yourself, ranging from cautious to aggressive.
Finally, Stash will need to know how long you wish to invest your money. If you’re saving for a down payment on a home, you may pick the “soon” or “very soon” alternatives. If you’re saving for retirement, you’ll probably pick the “not for a while (5+ years)” option.
Other questions include:
- How do you submit your taxes?
- What is your family income this year?
- What’s your job status?
- Where do you work?
- How did your household’s total expenditure relate to your overall income?
- What type of emergency fund do you have?
- How confident do you feel about accomplishing your long-term financial goals?
- Are you saving for retirement?
- What’s your estimated net worth?
After you complete out the Stash questionnaire, you’ll get the opportunity to join Stash as a paid member.
Based on your responses to the questionnaire, Stash will provide you a choice of investing alternatives. These possibilities are split down into three major categories: conservative, moderate, and aggressive.
Choose the finest choice that suits your future aspirations. In general, if you’re young, you may want to pick aggressive since you can afford to take greater chances with your assets.
If you’re fewer than 10 years away from retirement, you’ll probably want to adopt a more cautious strategy.
The categories relate to the projected risk-reward ratio of each investment and how risk-averse you are. Once you pick the sort of investment you desire, you may choose from themes that concentrate on certain areas, such as technology or renewable energy.
After you’ve set up your account and selected your investments, the next step is to actually put money to your account. After your first investment, you may continue to contribute money at your leisure.
Stash makes saving entertaining with a range of savings objectives and milestones to strive toward. If you start with merely $5 in your account, Stash can challenge you to raise your balance to $50 or $100. When you reach that goal, Stash will come up with a new one.
Stash also lays a large focus on financial education. When you see your current balance and your objectives, Stash will demonstrate how your money may increase over the following five or 10 years and how altering your savings behaviors will effect your profits.
Like some other investment applications, Stash allows clients purchase fractional shares.
Fractional shares are when investors may acquire part of a stock or fund. This is what permits investors to acquire companies like Amazon or Apple beginning at only 5 cents, even though one share of Amazon costs more than $3,000 and one share of Apple costs $450.
Stash includes an automated investment tool called as Auto Stash. This approach helps you save money automatically on a recurrent basis. You determine how much to save, what account to draw from, what to invest in, and then Stash takes care of the rest.
Stash also provides a round-up option, where it rounds up your transactions and then invests the total cash. So if you make a purchase with a connected account for $9.50, Stash will round your transaction up to $10 and invest the $0.50 difference. You need to have at least $5 in your total round-up account before Stash can move it to your investing account.
However, it will only be sent to the cash component of your investment account. You’ll have to make sure that monies are invested the manner you wish.
Stash also enables automated savings transfers, marketed as Smart Stash.2 The software analyzes your buying patterns and then distributes money in amounts of $5, $10, or $25. You may determine the maximum amount for Stash to transfer and switch Smart Stash off or on at any moment.
Stash features a large choice of stocks and ETFs from respected firms such as Vanguard, Charles Schwab, and iShares.
One thing that Stash does differently is that they rename their stocks and ETFs to simplify investing for customers. For example, the Vanguard fund VTI is also known as the Vanguard Total Stock Market Index Fund.
Stash refers to it as “Equities Nationwide” to represent how it owns stocks such as Microsoft, Apple, Amazon, and Facebook.
This technique may be perplexing for seasoned investors, but it’s excellent for people just starting started or who desire a basic investment experience.
Stash investing fees
The Stash app provides three membership plan choices for $1, $3, or $9 each month.
Each plan has its own distinct characteristics. All three choices are accessible to all clients, regardless of their account balance.
Here’s a short glimpse at Stash’s cost structure:(
However, these aren’t the only costs you’ll pay. Stash invests your money in Exchange Traded Funds, or ETFs, which contain a range of equities and bonds. ETFs also impose management fees, which may vary from .05 percent to 1 percent or more of your balance every year.
The ETFs that Stash provides carry fees between .20 percent and .40 percent , so you might end up paying .5 percent or more of your balance each year to utilize the service. While that may seem minor, these fees may build up and cut into your investment profits over time.
In contrast, they are quite minor costs, and you’ll have to pay them whether you employ another form of investment business or robo adviser.
Additional Stash Features
In addition to offering a streamlined, straightforward method to invest, Stash provides custodial, retirement, and rewards-earning bank accounts.
Once you become a Stash member, you have access to Stash Banking, their bank account program that has no monthly account fees, no overdraft fees, and no minimum balance requirement.
The account also comes with a debit card, free mobile check deposit, bill pay, and access to an ATM network.
When you open a bank account with Stash and set up direct deposit from your job, you may receive access to your money up to two days before it really touches your account.
You’ll also receive prizes on specific purchases, which you can then redeem for shares of stock. For example, if you purchase lunch at McDonald’s, you may receive cash back that subsequently buys you shares of McDonald’s stock.
If you’re thinking about saving for the long haul, you may want to take advantage of Stash’s retirement accounts.
This feature provides the same investing services as the normal Stash Invest service does, but instead of placing the money in a taxable brokerage account, you’ll establish and contribute to a retirement account.
You may establish either a Traditional or Roth IRA via Stash and utilize them to save for the future.
Like any other IRA, you can’t take withdrawals until you are 59½ without incurring a penalty. Roth IRA contributions, but not profits, may be withdrawn penalty-free at any time. 7
As a parent, creating a custodial account like the ones provided via Stash may help educate your kids about saving and investing from an early age and give them a leg up later in life.
A custodial account is an account you create in your child’s name that you manage. It’s included in the Stash+ membership level, which costs $9 a month.
Parents may invest in the same individual stocks and ETFs that are accessible on the Stash platform. The money in a custodial account might be utilized for college fees, purchasing a vehicle, or touring.
Upsides of Investing with Stash
Stash comes with a few features that set it apart from rivals, like a beginner-friendly platform and free stock giveaways.
Good for beginners. Stash was developed with newbie investors in mind. While it’s a terrific method for individuals to get started, and it provides useful teaching resources, its price structure and inability to take complete control of your investments make it a bad option for anyone with more money to contribute or a want to be more hands-on.
Stash is ideal if you’re a recent grad or interested in developing a portfolio but don’t have a lot of dollars today.
Free stock giveaways. Stash sponsors frequent Stock Parties, where you may receive free stock shares. These stock parties are conducted at the same time every week. You log in during that period and receive free stocks. Financial counselor Anthony Kirlew of Fiscally Sound advocates setting an alarm on your phone so you don’t miss these gatherings.
High ratings. Stash has a 4.1 score from the Google Play Store and a 4.7 score from the App Store. Reviewers claim the software is straightforward to use and motivates users to save more. They also claim the app makes investment appear more viable because of its low barrier to entry.
Reasonable fees. Stash features very minimal fees and few minimum requirements. “Some could think the monthly charge is a downside,” Kirlew stated, “However I am on the Beginner Plan which only costs $1 per month, and I earn at least that much in free stock (from the stock parties), so I am good with the expense.”
Earn stock back incentives. If you have a debit card with Stash, you may earn stock as a reward for purchasing at specific merchants. This is comparable to how you’d receive cash back with a credit card, but this allows you earn stocks in other businesses like Nike, Starbucks, and Lowe’s.
Downsides of Investing with Stash
Though Stash’s merits, in many circumstances, exceed the negatives, the program does come with certain downsides you should consider.
Poor customer service: Some consumers report that Stash provides bad customer support. For example, one customer reported that Stash promised a $30 bonus if he placed money into his account, but the incentive never showed up.
High expenditure ratios: Other reports suggest that Stash’s cost ratios, which is a fee imposed by Stash for managing the assets, are high compared to robo advisers.
Limited investment choice: Stash is likewise restricted in its investment capabilities and alternatives. They don’t have tax-loss harvesting and automated rebalancing – two things that rival robo advisers provide. “For individuals who want support managing their portfolios, Stash may not be a smart choice,” said financial expert Miranda Marquit. “You can receive some help in picking your assets, but there isn’t portfolio management.”
If you’re serious about saving for retirement, check out a robo adviser instead or engage a financial counselor to design a tailored plan.
High fees. While the monthly fees may appear little, they might really involve a substantial portion of your wealth if you’re not investing that much.
Apps Like Stash
If you’re not convinced if Stash is a good match for you, you may test out alternative saving and investing applications. There are other Stash alternatives that offer excellent ratings and inexpensive costs.
Acorns, An Alternate to Stash
Stash and Acorns both give a great possibility for brand new investors to create a portfolio.
Acorns includes a round-up option, similar to Stash, where the app will round up your transactions to the next dollar and invest the difference. Customers may also acquire an Acorns debit card that makes automated payments from your checking to your investing account as you spend.
Like Stash, Acorns features inexpensive pricing. The subscription costs $1, $3, or $5 a month, depending on the plan you pick.
Qapital is an app that helps you save for objectives like purchasing a home, going on vacation, or establishing an emergency fund.
When you start a Qapital account, you’ll determine what your goal is and how much to save towards it. Then you may set up savings guidelines to assist you attain your goal.
These regulations include round-ups on your purchases and transmitting money every time you grab a cup of coffee, post on Facebook, or meet a Fitbit goal.
They also offer a Qapital Invest account where you may invest in low-cost ETFs if you want to save for retirement.
If you’re only interested in an automated savings program and don’t require the investment component, consider Digit.
Digit analyzes your expenditure and transfers money from your checking account to your Digit account. You may establish several savings goals and save towards many at once.
The money that Digit saves for you is FDIC-insured up to $250,000, like a traditional savings account. Unlike a savings account, though, Digit charges $5 a month.
Stash Review Summary: Who Should Use This App?
Overall, Stash is a competent service that does a nice job of aiding beginning investors. It falls short of being a terrific tool for everyone since more skilled investors will want to take a hands-on approach that just isn’t achievable with the services that Stash offers.
“A key plus, particularly for new and young investors, is that you can start investing with Stash with only $1.“
1. Debit Account Services supplied by and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Investment goods and services offered 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 created a taxable brokerage account on Stash. Account establishment of the debit account is subject to Green Dot Bank approval.
2. The recurring transfers function is supplied by Stash Investments LLC and is not sponsored or supported by Green Dot Bank.
3. Stash does not monitor whether a client is qualified for a certain form of IRA, or a tax benefit, or whether a lower contribution limit applies to a customer. These are based on a customer’s particular circumstances. You should contact with a tax adviser.
4. You’ll also suffer the regular costs and expenditures represented in the price of the ETFs in your account, plus fees for other ancillary services provided by Stash and the custodian.
5. For Securities valued above $1,000, purchasing of fractional shares begins at $0.05.
6. Before investing in any exchange-traded fund, examine your investment goals, risks, charges, and fees.
7. All profits are tax free at age 59½ or older, if your initial contribution was more than 5 years previously.
This material is not intended as investment advice and is not meant to suggest that any securities are suitable investments for any particular investor. Investment advice is only provided to Stash customers. All investments are subject to risk and may lose value.
Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser.