Every new investor faces two challenges:
- The barrier to entry is too high
- Not having the slightest idea of what to actually invest in
It’s no secret that investing jargon can sound like a foreign language. This can deter many people from ever taking the time to learn what they actually need to know. On top of that, many brokerages require investors to have minimum balances and automatic deposits that are just too much.
Fortunately, those days are long gone.
Technology has been huge for lowering investment barriers. There are now so many options that are both accessible and easy to understand by everyone.
One of these options is Stash Invest. You can get $5 for free when you sign up and make your first investment!
Stash is great because the app allows users - who perhaps don’t have a ton of money - to buy fractional shares of a stock. Want to buy Amazon but a single share costs $1,000?? With fractional shares, you can buy a percentage of a single share.
Stash isn’t the only one offering fractional shares - the functionality has become popular and companies like M1 Finance also offer it on their platforms. M1 Finance allows you to build a portfolio of stocks and ETFs for free – yes free. No fees.
Plus, many of the major brokers now offer commission-free investing, so keep that in mind as you make your decision of where to invest.
If that sounds appealing, then I recommend you check out these 5 apps that allow you to actually invest for free.
Quick Summary
- Automatic investing app to invest as little as $5
- Makes investing "easy" by really simplifying the process
- Fees as low as $1 per month
Stash Invest | |
|---|---|
Product Name | Stash |
Min Investment | $5 |
Annual Fees | $1/mo to $9/mo |
Account Type | Traditional IRA, Roth IRA, Taxable |
Promotions | None |
Why Stash Invest?
Stash Invest is an app that launched in 2015 after the founders set out to answer the question: why don’t half of Americans invest?
They kept coming back to one answer. Most people found investing to be un-relatable, expensive and intimidating. (Can you relate?!) From those answers, Stash Invest was born.
The Stash Invest app allows investors to start investing with as little as $5. Not only that, but Stash makes choosing investments extremely simple.
They also have low fees at only $1 per month, for basic banking and personal investing.
Stash Invest Pricing
Stash Invest recently updated the pricing and tried to simplify their offerings.
They currently have 3 pricing options - all flat fee offerings (versus the previous structure of AUM).
Beginner: This plan is $1 per month, and offers a basic brokerage account and Stash Banking account. It also offers free financial guidance.
Growth: This plan is $3 per month, and allows retirement investing, along with a taxable brokerage account and banking options.
Stash+: This is their most robust option, and is for families who want to save and invest. At $9 per month, you get not only taxable and retirement investments, but you also get up to two custodial investment accounts for your children (note: these are not 529 plans).
These options compare to Acorns, but are slightly more expensive in some regards, although you do get banking at every price point.
How To Get Started In Five Simple Steps
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.)
# 1 – Click Here To Get Started
Click here to check out Stash Invest online and get started on your desktop.
Click here to get Stash for free on the App Store, you’ll be directed to the app store and you can download the app to your phone.
# 2 – Fill Out Your Profile
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.
How To Actually Invest With Stash Invest
Stash does things differently than your traditional investing app or brokerage.
Instead of choosing a stock or ticker symbol to invest in, you choose from themed investments.
This is a really great way to make investing relatable, while at the same making investing affordable and easy.
For example, if you believe that Americans will spend more on healthcare simply because they are getting older, you could invest in “Doctor, Doctor”. This investment is based on an ETF that invests in U.S. healthcare companies.
Similarly, you could invest in "Companies”. For example, you could want to invest in a piece of Warren Buffett through his company, Berkshire Hathaway.
When you click on an investment you can see the underlying holdings – real companies that you invest in.
Purchasing an investment is really easy. You just click on the “Add To Portfolio” button and enter how much you want to invest.
What To Do Next
The goal of Stash (and any investment account) is to build your portfolio over time. Stash Invest makes it fun and easy by creating milestones and ways to encourage you to invest more.
Once you make your first investment, you’ll get the milestones based on thresholds:
Stash also tries to show you your potential – by both adding new investments and teaching you the value of investing often.
Over time, you can check in your home screen and see how your portfolio is doing overall.
You can also enable Diversify Me.
- Diversify Me simplifies the portfolio building experience and guides customers towards a well-balanced, diversified foundation in their investment accounts. STASH’s diversification engine automatically constructs starter portfolios that are tailor-made for each customer. Then, customers can invest their desired amounts with just one tap.
Stash Retire
Stash has a feature called Stash Retire, which is a retirement account option for investors. Stash Retire offers both Traditional and Roth IRAs – and offers the same investment choices you’d find in Stash. You can contribute up to the IRA Contribution Limit in a Stash Retire account.
Stash Retire is part of the Growth Plan, and it is slightly more expensive at $3 per month.
You can still start investing with just $5, but that could be quickly eroded by fees if you don’t invest more and see investment gains.
Stash Banking
Stash also recently partnered with Green Dot Bank to launch a banking feature on its app¹. They offer a debit account with no overdraft or monthly maintenance fees², access to a large network of free ATMs nationwide³, ASAP Direct Deposit™ which enables customers to get their pay up to 2 days early⁴, as well as Stock Back™⁵ the only rewards program where customers earn stock every time⁶ they spend.
Every STASH customer also receives personal guidance across every aspect of their finances—from spending to saving and investing‚ with actionable advice to help them get the most out of their money.
Of course, the banking aspect connects seamlessly to Stash Invest, to allow you to manage all your money in one place.
Also, with banking, you can do the following:
- Round-Ups to grow savings on auto-pilot. Every time customers spend, STASH will round-up the purchases to the nearest dollar. Each time the round-ups total hits $5, STASH will transfer the spare change to the customer’s personal investment account.
- Cash Back gives customers the opportunity to earn up to 10% cash back on everyday purchases. Customers can opt-in and then connect up to three credit or debit cards and automatically earn cash back each time they spend at participating retailers nationwide. Based on customer location, the feature will surface cash back offerings nearby, allowing them to conveniently discover new retailers and great deals at places they already shop. Customers can invest the earnings in their favorite stocks or withdraw the money at no cost.
The Cons of Stash Invest
The biggest drawback of Stash is the cost. $1 per month may not seem like a lot, but on a small portfolio, the percentage is very high. $1 per month is $12 per year. On a $100 investment that is 12% in investing fees. That's incredibly hard to earn back, and those fees keep coming. That can really kill your portfolio's earning potential.
When you look at $3 per month (or even $9 per month), you need to invest a large amount to make the fees competitive to other platforms.
Let’s look at an example to break it down. If you’re interested in Technology Stocks, you might consider investing in Stash’s Internet Titan’s ETF. This ETF is actually ticker symbol FDN, which is First Trust Dow Jones Internet Index Fund. This ETF has an expense ratio of 0.54% – which is pretty high for a domestic ETF.
If you want to invest in a similar ETF at Fidelity, you’d probably go with FTEC, which is Fidelity MSCI Information Technology Index ETF. It invests in the same companies, and it has an expense ratio of just 0.08%. It’s also commission-free to invest in. The Stash ETF alone is 6.75x more expensive to own than the fund at Fidelity. Plus, you have that $1/mo fee on top of it!
So, if you have a $1,000 investment in this fund, it would cost you (per year):
- At Stash: $12 (the $1/mo fee) + $5.40 (the fund’s expense ratio) = $17.40
- At Fidelity: $0.80 (the fund’s expense ratio) = $0.80
In percentage terms, your investment would end up costing about 1.74% per year in fees.
At Fidelity, it’s just the 0.08%. So, when you add in the monthly fees, it ends up being 21.75x more expensive to invest at Stash than Fidelity!! All those extra fees are doing is hurting your return over time.
I spoke to Stash about this to see if they had any comment. The person I spoke to justifies the high percentage in fees by looking at what the customer gets in return of spending only $1 a month.
For example, unlike Fidelity, Stash has a beautiful and easy-to-navigate app built specifically with the user in mind (millennials). When a customer signs up to Stash, they are not just there to invest...they are there to learn.
Fidelity doesn’t exactly talk the user through their investment decisions the way Stash does, using layman’s terms the user can understand. Moreover, many people never end up investing solely because there are too many options on platforms like Fidelity!
It turns out millennials may be willing to pay $1 a month, even if by percentage terms that’s a lot, to learn how to invest, get recommendations on what to invest in, and most importantly, form the investing habit.
Alternatives To Stash
But if you’re like me, and don’t like high fees no matter how convenient and pretty the app may be, then I recommend opening an IRA or brokerage account at a mainstream brokerage like TD Ameritrade or Fidelity. What most people don’t realize is that you can open an IRA with no minimum, you can get access to hundreds of commission free ETFs, and you have a great app to use. You essentially can build your entire diversified portfolio for free, on an app.
So, instead of paying high fees and investing in their custom ETFs, you simply get a regular “mainstream” account, can invest in the same ETFs, and experience no fees.
Check out Fidelity for yourself >>
If you’re looking for something that allows you to buy small amounts, check out M1 Finance.
Final Thoughts
With Stash, all you need is $5 to make a deposit. This is perfect for anyone getting started. Plus, it’s so easy to understand!
A bunch of $5 investments can add up to something big.
If you want to get started investing but haven’t made the plunge, consider Stash, but also consider other options. For every investing style, there is likely a better and cheaper solution.
Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Nothing in this article should be construed as Legal or Tax Advice. For additional questions regarding Taxes, please consult a Tax Professional. Investing involves risk.
*Clients may incur ancillary fees charged by Stash and/or it’s custodian that are not included in the monthly Wrap-Fee.
1 Debit Account Services provided by Green Dot Bank, Member FDIC. Investment products and services are not offered by Green Dot Bank, are NOT FDIC Insured, Not Bank Guaranteed and May Lose Value. Account opening for the debit account is subject to Green Dot Bank’s approval.
2 Other fees apply to the debit account. Please see Deposit Account Agreement for details
3 Other fees may apply. Fee-free ATM access applies to in-network ATMs only. For our-of-network ATMs and bank tellers a $2.50 fee will apply, plus any additional fee that the Atm owner or bank may charge.
4 Early access to your direct deposit depends on deposit verification and when Green Dot Bank gets notice from your employer, and may vary from pay period to pay period.
5 Opt-in is required. In order to earn stock in the program, the Stash debit card must be used to make a qualifying purchase. Stock-Back Rewards that are issued to a participating customer's personal brokerage account via the Stash Stock-Back Program, are not FDIC Insured, Not Bank Guaranteed and May Lose Value. 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.
6. What doesn’t count: Cash withdrawals, money orders, prepaid cards, and P2P payment. See full terms and conditions.
Stash Investing
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Commissions & Fees - 30
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Customer Service - 30
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Ease Of Use - 60
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Tools & Resources - 60
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Investing Options - 70
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Specialty Services - 50
Summary
Stash Invest is a new app that allows investors to start investing with $5, while picking stocks in themed based investments around wants.
Terre says
I don’t care for an app you cannot investigate before inputting my bank account?
Plus, it’s pushy. Open the app and it flat refuses to close.
Unistalled.
Scott says
I am not really fond/want to connect my bank account info to what is supposed to be “My STASH ACCOUNT” -I don’t understand why I have to directly connect my personal banking accounts to an app that can withdraw fees from my account it seems to be a VERY HIGH SECURITY RISK to put your banking information on an app that you are simply trying to “STASH”/SAVE “Money On until you have enough to try to make investments that will flip your $50.00 into a $100.00 or just Make more money on what you choose to invest in.I think STASH would be a great idea if it was an account all by it’s self that you can use to make investments.
Len says
I agree. I would even prefer paying through a Paypal account or something similar. But directly connecting my bank account…makes me too nervous.
Becky says
Me too! Thanks for sharing.
Larry says
Is there such an option available?
Larry
Fort Myers, FL
J says
I was very impressed with the app. I started filling in the blanks until I got to the bank user ID and password… Ummm… Not just yet.
steven villa says
yeah, the app wants you to share your bank information before allowing you to read its policies. I sent am email requesting copy of its policies and got no reply.
Craig says
Terre – I’ve not had any problems with the app. Sorry to hear that yours didn’t work well.
I think one of the greatest benefits of an app and investment option like this is that it may help change the way that consumers think about saving money (the phone interface that makes account info readily accessible, very low minimum investment options, and real time updates). For me, it has helped me consider savings options on par with other real time purchase/spending options. For instance, do I get something to eat on the way home, or do I eat when I get home? Stash allows me to take the $10 that I saved by not eating out and put it immediately in my Stash account. So, savings/investing becomes a real time option, instead of a more distant/future alternative.
Alberto says
Interesting, how much have you made since then? I’m curious. …If you don’t want to share, that’s fine. I just can’t help but wonder as to the rate of return and the risks (if any) you were told there might be.
Bryan says
I started using Stash in March, 2017. I put $25 in. I did watch it grow … pennies, obviously… but it showed me 3 things quickly: 1. I’d never invested before because I thought I didn’t have the money to invest. Heck, I didn’t even save. But because you can buy partial shares in diversified ETFs, throwing $$s into investments became easy. 2) you need to commit to putting money regularly into it, even if it’s a little, because you need to earn enough to cover the $1/mo. fee. However, that’s easier over time because you’ll find that 3) saving money and WATCHING IT GROW over time is actually FUN! I never saved anything. Lived paycheck to paycheck. But after starting with Stash, I’ve found the way to make ends meet and still save money to invest. I started with $25, quickly got the “itch” and in 8 months I’ve invested $850 of money I never would have saved (about $100/mo… they will automatically invest any $ amount you’d like in any manner of investment you like on a regular basis. I have $50 taken out every 2 weeks and spread it out over 4 ETFs. The auto stash feature is nice and easy. It comes out of my bank account on payday and I never even miss it), … and after 8 months have $61 in earnings to show for it, and growing my savings (and future investment returns) at the same time.
Advisors say the $1 fee is excessive, but I find the ability to buy partial shares and spread the risk is easier with stash, and heck, I can’t get a 10% return on any savings account… can you?
Overall, I’d say for the small guy with a commitment to investing $50-$100 a month, it’s a Godsend.
Former NASD member says
By the time fees are figured, you’re actually so far at just under 6% averaged yearly yield. As you pointed out though, who gets that from a bank account? Answer, nobidy. So even at ~6%, STASHing still has value. Keep up the new habit, and I wish you great gains!
cj says
I agree with this 100%. It is fun and fulfilling to watch your money grow over time. I do not make a lot of money either but it does add up!
Lisa C says
Stash is great for the small and beginning investor. It also works for the individual who has a hard time saving. Stash makes it fun and since they only offer ETFs – fairly safe in the investment world. I agree with the author about the fee structure. The thing is people are putting in $5 that they would have spent on something they probably did not need. I like the Ameritrade for investors who have enough $ to buy one share. Then again I may use Robinhood who doesn’t charge any commissions. Even the ETF prices are getting up there in price per share. There has been no problems with the checking account except for people who set up an auto deposit and forget about the debit which causes overdraft fees. I don’t set auto deposit because I’m one of those that may forget. Stash lets the little guy invest in the market.
Lisa C says
I’m also up 9.8% since March 2017 and the program has encourage me to save $1300.
Rob Pavis says
I find stash to be very easy. It got me to invest and ive wanted to for years. In this time. I feel I am lucky to have found it. Imo its a great time to bet on American companies. Unless your Nordstrom.
Carlos says
I’ve been a user of the Android app since March of 2015. Set up is simple. There are access points on almost every page that enables users to transfer money into an account to create or add to an investment. However withdrawing or selling all or part of my investment (not dividends or available cash) is hidden. The cognitive workload that it takes to find a call to action that will enable me to withdraw or sell my investment is a deal breaker. If an app or any service for that matter is great at acquiring customers then they should be equally transparent when it comes to cancellation of service.
BillN says
I concur, Carlos, as I have yet to find the “secret trap door” that allows me to withdraw my cash at my disposal.
Chris says
It is easy, click on your investment and click on the orange buy/sell button in the top middle. Follow the prompts. Not sure why you don’t see that. Hope that helps.
Tim C says
Exactly. Ive had no issue.
Sandra says
I so agree with being able to acces and close your account with Stash. I can only find an email to contact them, and to date I have tried three emails to them without a word back. I stopped all debits from my account a while ago and now they attempted to debit my account 1.00 and I did not have funds in this account they want me to pay them 30.00 to have access to an account I asked to be closed a long time ago. This is now sounds like a scam. How come they will not respond to my emails asking them to close my account???????
Vick says
Stash isn’t available in other countries……kinnda bad for me now that i’m out of the country
Robert Farrington says
Did you start your account in the US and now can’t access it?
Diana says
I having the same problem trying to find out how to withdraw my money.
Robert, any thoughts on that?
Robert Farrington says
I had to email them, and that was annoying. You can contact them here: support at stashinvest dot com
Cesar Castillo says
A little late, but did you guys have success withdrawing your money? Every time I try and withdraw money (selling the stocks) I get half of it to my available money to use and half to my available money to withdraw which is really irritating because I want all of my sold stocks to be able to be withdrawn not just half!!
Robert Farrington says
Yes, but I had to email customer service.
Mazi says
How can you recommend tdameritrade over stash where you end up paying more in tdameritrade….let say with stash you buy the same etf every weeks for your retirement account it will only cost you 12 dollars plus the etfs fees in one year where with tdameritrade you end up paying almsot 7 dollars for every transaction that is around 364 dollars plus the etfs fees. Yea i know they offer free etfs but they dont offer the popular ones like vanguard etfs so you stuck with some etfs you dont want. So im using both and tdameritrade costed me aloot more just in commisions than stash.So let me know what your thoughts on it.
Robert Farrington says
What do you mean they don’t offer popular ones? They offer over 500 – including many “better” ones that Vanguard. They offer the iShares family and SPDR family of funds – many of which have lower expense ratios than Vanguard today (that changes – they are all in a battle). See for yourself here: https://research.tdameritrade.com/grid/public/etfs/commissionfree/commissionfree.asp
SM says
It’s an investment app. Not a trading app/checking account. I’m new to it and and it’s pretty clear in their pitch, that this isn’t meant for aggressive trading and withdrawals. There are hundreds of apps for aggressive stock action. Emailing or calling this company to get your money shouldn’t annoy you when this is clearly an app for beginners who would like to “invest” for at least a while and/or learn how to save for the future. It might help to read before you toss your money into something.
Robert Farrington says
No matter what type of app, no company should make it difficult to close or withdraw your funds. What if you simply want to move to a truly free brokerage? Most online brokerages and apps don’t make it difficult to withdraw funds.
Andrew says
Man I don’t know if you have some kind of personal vendetta against Stash. But I’ve been using this app for nine months and I’m up 14% on my investments.
Robert Farrington says
No personal vendetta, they are just really expensive to invest in. I always say that Stash makes it super easy to invest, and it make it understandable. However, you are paying 21x what you would pay at a discount broker – for what? Up 14%? If you spend 20-30 minutes learning the basics, you can easily do the same thing at a discount broker like Vanguard, Fidelity, TD Ameritrade, etc.
You are underperforming the stock market right now – the S&P 500 is up 20.25% YTD through December 1, 2017. Even if you had a 75% stock and 25% bond portfolio of low cost ETFs, you’d be up 15% – so you’re underperforming, likely taking on more risk because you’re not diversified, AND paying more for the privilege… help me understand?
Gary E Hall says
Get back to us once you’ve tried to close your account.
Jace says
14% minus 12% (fees) so you are at 2%
Arlene says
What are the fees and associated cost on withdrawal? If in case I want to close the account, what are the termination terms? Would like to know the full picture not just bells and whistles, thanks.
Robert Farrington says
Their outgoing ACH fees are free currently. Here’s their fee schedule: https://stash.freshdesk.com/support/solutions/articles/6000094736-account-maintenance-and-bank-transfer-fees
Chris says
Not that hard guys. Click on investment you made. Click orange buy/sell button. Click sell. Type in amount you want to sell….follow prompts. Hope that helps all.
Alex says
The little as $5 is quite misleading. You’d have to have returns of 240% to actually make money. But they don’t increase the fee rate until you get to $5,000. So the more money we add (up to $5,000) the less we lose in fees.
At $100, we still need returns of 12%. That’s pretty unlikely, but not impossible.
$250 – 4.8% This is probably about all we can expect to make on our investments. We might make a bit more, but we could do less too.
$500 – 2.4% This is tipping more in our favor already, making 3% off our investments should be pretty easy. (But by no means guaranteed)
$1,000 – 1.2% Now we’re getting into more profit
$2,000 – 0.6%
$3,000 – 0.4%
$4,000 – 0.3%
$4,999 – 0.24% – This is the best fee ratio that we’ll ever hit. If we have a return of even a low 3% we’ll still be making $150 (and they’ll take $12 of that)
$5,000 – At $5,000 the fee model changes to a flat 0.25%, which is only slightly worse than what we were getting before.
The catch here, of course, is that we aren’t guaranteed a 3% or 7% return. We aren’t even guaranteed a positive return. You could lose 10% and still get dinged with the monthly fees.
Contrary to how they are marketing it, this isn’t an app for someone to try out investing with a few bucks to see what happens. If you want to hope to make enough to overcome the fees then you’re going to need to risk at least $250 or $500. Any less and you’re not really investing at all, you’re just paying their fees. They deduct the fees from your bank, not your stash in the app. So it may look like you’re making money as your stash goes up, but really you’re just dinging your bank account with their monthly fees.
If you can do more than $500, then you have a shot at actually making some money here. But to the article’s point, if you have a couple thousand dollars laying around, there are other places that you could attempt to invest it for less fees. The $5 they spot you to start, and the free month they give you, does give you 6 months to invest without fees and see what happens though. But don’t stick around any longer than that unless you’re willing to risk some real money on this project.
Robert Farrington says
You’re spot on. The title of the article is “Investing With $5 Isn’t Worth It” and we say so in the first paragraph. We recommend opening a no-minimum IRA at Fidelity or TD Ameritrade, and leveraging their commission free ETFs. Now you have an almost truly free investing experience.
Paul says
I have to disagree with the author I do not feel Stash is expensive. I’m sure from money crunching financial geeks the percentage is high but $12 a year is $120 in 10 and if I invest $600 monthly and can get 2.9% return I’m sitting at $84k give or take and it cost me $120 in 10 years or so. I have a traditional brokerage account and I find Stash easier. But that’s just my opinion and I know nothing about this stuff since I’ve lost more money trying to figure it out than anyone I know so for me Stash is really nice
Robert Farrington says
If you do choose to invest $600 monthly, you’d quickly jump into the 0.25% annual fee amount.
In year one, you’d pay: $8 + $18 = $26 in fees to Stash. That ends up equaling 0.36% in expenses, which might not see like a lot, but it is an additional fee on top of what you’re paying the ETFs inside Stash. That’s why we recommend going with something truly free.
Even a robo-adivsor like Wealthfront that charges 0.25% in fees gives you the first $10,000 free so that you can escape the high fee/low amount timing of your portfolio. And for their fee, they actually do the investing for you.
Bernadette Torres says
Hi Robert Farrington,
With Wealthfront, is there a penalty when withdrawing?
Robert Farrington says
Nope: https://support.wealthfront.com/hc/en-us/articles/211007383-Does-Wealthfront-charge-fees-to-withdraw-funds-
Tim C says
Started my stash acct about 8 months ago. If all you plan on saving is $100 a year then yea the fees are bad. I have automatic deposits set up and ive made a 5% return. I love the ap and haven’t had any issues with it. TD Ameritrade and Fidelity may have lower fees but they charge $10/transaction. Don’t get bent out of shape about $1/month
Robert Farrington says
Tim, both TD Ameritrade and Fidelity offer countless ETFs with no transaction fees. Since Stash does ETFs, this is extremely similar (and free) You can find the list here:
TD Ameritrade – https://research.tdameritrade.com/grid/public/etfs/commissionfree/commissionfree.asp
Fidelity – https://research2.fidelity.com/fidelity/screeners/etf/etfholdings.asp?freeEtf=all
Second, Fidelity currently offers a promo of 200 free trades for 2 years. That means you could build a portfolio of non-free ETFs and still not pay anything.
Finally, the S&P 500 has returned roughly 9% over the 8 months. You have underperformed the market by 3%.
Jen G. says
I’ve been using Stash for a year, and I love it. I’ve also had no trouble selling off my ETFs. I like it because IRAs usually have penalties for drawing money before retirement age; whereas, if I needed to… I can draw from Stash. They’re also coming out with something called Stash Retire, which will be a Roth IRA. I’m going to do that too. Never can you have too many baskets.
Robert Farrington says
I’m so confused by this because you say you don’t like IRAs because they have penalties for withdrawing the money early, but then you promote their new product Stash Retire, and say you’re going to do that too. This sounds phishy to me.
If you’re looking to do an IRA, open an account at a place that doesn’t charge you fees!
Jen G. says
I’m not opposed to an IRA, and I’ve been looking into them. But generally, I prefer most of my investments to be less rigid long-term options. I’ve looked into Ameritrade tonight, signed up, and made my first transfer. I’m not sure what I think about it yet, so the jury’s still out. The appeal of Stash is that it’s made easy. I’ve always found investing to be daunting, which is where other trading platforms have always lost me. Now that I’ve stashed for a year, I’m feeling more confident and learning as I go along. There’s nothing “phishy” about that.
Taylor Overman says
I have really appreciated reading the above article! Although I do not disagree that the misleading alignment for “new investors” is to start off with $5 (huge % of fees with this balance), I think it is a extremely practical approach for people that have a few thousand dollars sitting in the bank account. Personally, I TRADE with Robinhood with no fees and have done well by using technical analysis off third party sources and this has been great! However my biggest draw to use STASH as well was that I wanted a place to put a couple thousand dollars in a less risky – moderate investment fund where it has the capability of increasing in value apart from the extremely lousy 0.001% interest in typical major banking accounts. I was tired of seeing “Interest Credit – $0.07” in my account instead of something I could at least buy a hamburger with.
Alex says
A friend of mine uses Stash. I did not really know much about it until reading reviews today. I told him to sign up with Robinhood instead because the $1 monthly fee is still $12 he would have to generate annually with his Stash account to just break even. I missed telling him that the ETFs he has also have expense rates, so the $12 is on top of the fund expenses. I imagine he does not have much money in Stash currently. I do not even know how Stash buys the ETFs. Can you buy fractional shares? That is the drawback with Robinhood. You have to buy whole shares. He is a generation younger than me too. I kind of want to give him advice I wish I had when I was his age. He is on the right path I guess but since he is a millennial, I think he does not have much money to invest or does not understand that he could FIRE in 20 years if he wanted to.
Bryan says
The problem I had with Robinhood when I was JUST starting to invest was having to buy full shares. There’s no way to diversify your risk when you’re investing in yourself by $100/mo. You can buy Stash ETFs in fractions. I started small, realized I was going to get KILLED in fees if I didn’t commit, started investing $50 every 2 weeks out of each paycheck, and in 8 months now have $850 saved with an additional $61 in earnings (drawing about a 12% return right now). From a guy who never saved a dime in years. Pretty proud of that. Baby steps… If I get to where I can buy full ETF shares, then TD or FIDELITY would be viable. But right now, for ease of use, and with the $ amount I’m investing every month, Stash works for me just fine.
Karl Anway says
I just downloaded the app a couple months ago for the fun of it. I only throw a small amount of money ($25/wk) into the account, but I like to trade aggressively with it just for thrills. This is roughly the same amount of spending I otherwise would spend on a hobby or game, and even at a loss I will still have something left of my money when I get bored with it and cash out.
So far, 6 weeks in, I’ve averaged just under 1% per week, which has earned me $4 to offset the $1 charge coming up.
Honestly, this article is totally correct to say that Stash isn’t worth the money as a true investment app. However, as a training tool or a fun way to feel like a rich kid, go nuts. My only complaint with this app really is that they consistently miss the two trading windows that they use, and it can be very frustrating watching a stock price free fall after you’ve already put in the sell order an hour previously. If they’re going to impose trading windows, that’s fine, but they should at least hold to using the trading windows they say. Today, my purchase didn’t go through until 45 minutes after the trading window closed, and that’s a long time in stock land.
Mike says
If all you can set aside is $5, you’ve got no business in even thinking about investing…Another fintech company exploiting the ignorance of consumers. Think about how they market themselves..”invest in things you care about…” Their entire appeal (to those uninformed) is based upon the #1 fundamntal rule which is to NEVER make decisions based on emotions…that should tell you all you need to know about Stash. Sure it’s easy…for them to get your money from your account into theirs. Nothing against Stash, calling it like I see it.
Brenda Engelbrecht says
I just signed up for an account with Stash today. I am looking long-term, and more than $5 a week. Assuming that my choices were of the more “positive” trend than “negative,” I actually see me earning more than a regular savings account, which I have minimally also. I like the the idea of playing around with the various ETFs, but I won’t discontinue my 401K, or mutual funds. I really wish that something like this had been around when my son was younger, if nothing else than to show him what his money could do for him. I do not think he has a clue as to what is available to him besides savings. I don’t have a perfect past with finances, so far be it to take my advice, just wish he would learn about investing, he works too hard not to.
Jayne says
Way up top of this fascinating string, someone mentioned their anxiety about entering their bank account into an app they haven’t even broken in yet. I was surprised more people didn’t raise the same flag. I started creating my Stash profile tonight and it asked for my phone #–ok, I’m a little squeamish about that, but I gave it–then my SS#–yes I KNOW they need it, but it’s like being asked for a *u** before we’ve had our first dance. And then they want my bank account? I wanted to slap them in the face and tell them I’m not that kind of investor.
But when I googled “is Stash safe?” there were no gongs clanging or nails screeching on blackboards about identity theft or worse, so I guess inputting this ultra-private formation is okay. Right? It just seems out of step with the paranoia of the times.
HOWEVER: why can’t I use my Paypal account as my funding source? (As that first up-top genius also asked.) My bank account is joint with my husband; my Paypal is my own. If Stash wants this intense intimacy and I’m not ready, wouldn’t Paypal or another kind of account be a good way to get acquainted? I thought this was supposed to be about investing MY WAY, with choices. It shouldn’t matter to Stash where the investment money comes from, so…conclusion: I’m gonna shop around some more.
Do click the “5 more investment apps” link up above, btw. Good info.
B says
I’m like that previous commenter who got a bit nervous when they asked for s o much personal information but surprisingly I gave them my social and right NOW it’s at the enter your bank info on my other phone, while I googled is this app safe, which lead me here and I think I’m going to stop and NOT give my bank info and get out while I can! Thanks for all of the advice..
Dan SaIl says
Stash app is great and it is not expensive as you suggest.
Robert Farrington says
It’s definitely expensive comparing to competing financial tools. At every level – from the beginner Stasher with just $5, to the advanced investor, there are better, lower cost options across the board.
Brenda says
But if you are just starting out and not the “advanced” investor then why not try Stash? It is really not expensive. And who really invest only 5.00 a month?
Robert Farrington says
Sadly a lot of people only invest a little bit and get eaten up by fees.
According to their latest regulatory filing, Stash has 1,002,613 accounts, with a total asset value of $318,988,278. That means their average account has $318 in it! At that level, the average investor is paying Stash alone 3.77% in fees to invest at $1/mo (not including the underlying fund expenses). That’s extremely expensive to other options on the marketplace – and for every scenario I can think of, there is probably a better choice.
You don’t have to be advanced to use any other platform. What are you looking to do?
– Trade stocks, bonds, ETF? Maybe Robinhood or M1 Financial
– Invest in ETFs or want a pre-done portfolio allocation? Maybe M1 Financial
– Fractional shares are really important to you? Maybe Stockpile
– Only want low cost ETFs or mutual funds? Fidelity, TD Ameritrade, Schwab, etc
John Fall says
Does anyone know if Stash computes the taxable basis when one sells? I’m afraid of the hours it would take to compute the taxable basis from all of these tiny purchases.
Robert Farrington says
Yes, it will be on the 1099 they send you at tax time. Since 2006 the IRS has required that investment companies keep track.
Dirty white boy says
App SUCKS for poor folk. If you “only invest” $200 and average a 6% return, in a year you’ll have exactly $200… Well actually it’s even less when you consider inflation…
Bancorp has a 5% savings account (so long as the balance stays below $1,000)
Jasmine says
Now I’m kind of confused after reading this and the comments. So it it a good app to invest in or no?
Robert Farrington says
We don’t recommend it. There are better alternatives for pretty much every situation you want to invest for.
Nicky says
I am new to investing but using this app is making me money. ( I assume) Not sure if this is how buying and selling works but I deposit $60 a month over 4 different ETFs. Every day I check my portfolio. If my stock is up even just a dollar, I sell the profit. I have been doing this for almost a month now. I have $179 invested but also have an additional $90 in available funds.
Robert Farrington says
That’s not a recommended approach – you should buy and hold. Not only are you realizing a lot of gains (short term, so high tax), you’re not going to enjoy the benefits of long term growth.
Matthew G. says
I love Stash!
I did the math and investing for $5.00 is pretty silly to expect a return. It’s more of a headline as a minimum investment amount, which is fine.
I started off using stash when I was doing delivery of auto parts while putting myself through school. I made minimum wage and it was nice being able to toss 20-30 bucks a paycheck into an account that was really transparent and didn’t make me feel like a schmuck for having such low investment #’s.
I’ve tried acorns and Robinhood and felt like Acorns did not have the flexibility or the choices I wanted and Robinhood is a bit advanced for where I’m at.
After about 16 months of using stash, I have about $4,000 in it with $500 gains.
Wow! Honestly, that’s not too bad as I’m diversified but have most of my stocks in American Tech and some in Asian companies to help balance the portfolio.
Dividends are cool and this app definitely has helped me get my feet off the ground as an investor.
I feel like this article was way underdone. It was like you wrote a review of the restaurant by trying out the mints in the waiting room. You didn’t really experience it all.
But that’s my personal opinion. Honestly, I feel like you need to stick to whatever investment you want and stick it out to be able to see good returns.
If you’re trying to make money in less than a year, you’re gonna have a bad time.
(experience, Wells Fargo banker, loan officer for small business administration, minimum wage worker, consumer neuroscience cert, current Production Manager at an engineering firm.)
Jace says
that’s 8% return. not bad
Sade says
I want to start investing and this app sounds good but the thought of putting my bank account details is putting me off completely. If there was an option to use PayPal and then they take fees from my investment and not from my account I would so sign up for this. But I will not risk my banking info and besides, I hate money leaving my account automatically. I’d rather be the one to decide what leaves and what goes in.
Michael says
I don’t mean disrespect but if you “hate money leaving my account automatically” it’s because you don’t have a clue how to take care of and track your money. I would get financial assistance and maybe take a financial class.
prakash parasuram says
Hmmm! I have been using stash, I think Farrington’s math is inaccurate, with the internet titans example, he has taken a corner case, .58% + $12 and making it 21% expense. Stash allows you to buy fractional stocks, it is not clear what fees are involved there, but nowhere else can you accumulate AMZN, GOOGL or BRK.B fractionally without Fees, additionally dollar cost averaging should help you, and for college students after 10 years, they may have some stocks of AMZN, obviously all companies do not continue to infinity and you have to sell them at some point, but AMZN for now seem as sure as the ground we stand on, but I have TDAmeritrade and they charge $6.99 or more per trade, to even buy 1 ETF of internet Titans you would shell out $6.99+.58%. Regardless, the most disconcerting part of Farrington’s analysis is the lack of clarity on ease of withdrawl from Stash, does anyone have real experience on that?
Prakash
Robert Farrington says
Hey Prakash, have you checked out M1 Finance? You can invest in fractional shares of all those stocks for free? I can repeat the math at other companies like M1, and it still works out better than Stash. Stash is good for automatic investing and making it easy to understand things, but you pay a premium for that.
MLGodz says
Robert – I saw somewhere a code for under age 25 at stash no $1 a month fee. Can’t find it again I think it was retire25 but with that in play would you still suggest m1 over stash for a teen new investor?
Also can you explain again the best place for a new investor (no investment knowledge) for someone 50 years old…. IRA or regular investing etc thanks
Robert Farrington says
The Stash Promo Code: Under 25 investors can use the promo code “retire25” to get management fees waved.
I would still suggest M1 over Stash 100%. It’s free versus paid. For an older investor, I would suggest Fidelity or Vanguard. Furthermore, I would suggest meeting with a fee-based financial planner (not a financial advisor) to sort out how you can retire and help you make a plan.
Michelle says
For all those squeamish about providing their bank account info, I’m not sure there is an investment trading platform that doesn’t require that information. I’ve tried out several, and have always had to provide a bank account for the money to be drafted from to fund the investment, and in this case, drafting for the monthly fee. They are not going to let you go through Paypal because 1) that costs them additional fees that they would have to recoup from you somehow, and 2) I’m guessing there are additional securities regulations requiring *Cash* from investors rather than a funding vehicle like Paypal where investors could be getting charged on a credit card.
I love Stash — even though I have most of my investments elsewhere. The app is super convenient and well designed, and it motivates me to save more in the short term. I started with $25/wk, but even if you start out with only $5/wk, as long as you keep it up and actively look for ways to save and invest more over time, in less than a year, you will have well over $100. In my opinion they encourage people to start small, but not to stay there.
Maybe there are better options out there for someone on a low budget and no investment experience, but if the options you are considering are Stash or Nothing, I definitely recommend it as a starting point.
Ron says
Hello everyone, I have a question for the group. I have had my Stash account since January of this year and I am up almost 700$. I have been trying to sell one of my stocks. The account says the stock is worth 1100.00 but I can only sell 1025.00. I am trying to close that stock and do not want it anymore. Why can’t I get all my worth. If they take that much on each of my stock I am loosing some much money. And trying to get an answer is ridiculous. Why can’t I sell and get what my stock is worth.
Gavin says
No, with their system you get all your money but the way it’s processed on the back end gives you some up front and the rest a day later or something like that. Send them a support request and they’ll tell you. I can’t remember exact why it’s done that way but it’s not because of Stash it’s because of the way something is processing on the back end. You can also call them. It might be faster. I saw the answer to this on Reddit but I can’t remember the specific details
Roger says
You do get to sell it all, but you can only sell your full shares initially. The remainder gets sold in a separate transaction and usually takes an extra 1-2 days to get credited to your balance. But you get all of the face value of your equity priced at the time of sale.
Eg. if you had 5.5 shares at $50 per; total value of $275, and you sell it all-You would get $250 upon sale (5.0 x $50), then a day or two later you would get the last $25 being the value of your partial share.
Gavin says
When I started Stash, they gave me $5. Then I did a quote for life insurance (didn’t actually sign up though) and they gave me $25. Then I invited 3 friends since I’ve had it and got $5 a piece totalling $15. The way I look at it is, the $45 I’ve already gotten for doing virtually nothing has paid for almost 4 full years of using the service…PLUS they threw in the first 3 months free….before I put any of my own money in. I’m not sure if objectively this is the best way to look at it…but from a personal standpoint, I’m extremely happy. So far, I’ve learned a lot about investing via this app; I only have about $250 of my own money in there of which I bought in to Apple, Amazon and then also American innovators. As it stands right now while I’m typing this, I’m at about a 4.5% return which means that the $295 total has earned me about $13 so far.
Monique says
There is a Wrap Fee Program Brochure that states all of the terms of conditions that should be downloaded by the investor that answers all questions asked. Updated March 31, 2018. It provides the company address, email address and telephone number. It is a good idea to read the brochure first on any product or services of interest.
tim r holder says
I have linked my traditional bank account with my stash account and have automatic withdraw every two weeks to my stash account. How would I move monies from my stash account back into my traditional bank account? I see the buy/sell option and have used it a few times but the monies go to my stash that is not invested, not back into my traditional bank account. thanks
Selina Dixon says
The worst experience ever they automatically took money I did not authorize it when I can’t DM to get my refund all they could do is ask for me to give them access to use my computer this is not safe and when I cancel the account I get notification saying this could take up to 10 days to cancel this account and no one refund me my money I had to get my money refunded by going through my bank disputing the charge They told me that my email was hacked in which they gave me by email that I never use with them and could not tell me how did they get my email that I did not use it all with them I would never use this service ever again
Noah says
I really love Stash. I have been investing for a couple of years, and though the fee is a dollar a month, I have more than made that back in dividends. I have about 2000 dollars in the account which has just been from money I had extra that I wanted to save. I think Stash is way more transparent than acorns (which I also invest in). Acorns doesn’t say what your invested in (stock and ETF wise), but with Stash you see a breakdown of everything from performance to your total performance with the stock or ETF. I think I would be more concerned being invested in an app that charges nothing for what can they be doing with the money? Stash consistently has improved their services, and I have noticed that Robinhood and Acorns has taken a lot of the ideas from Stash.
Michael says
I invested 3000 3 days ago and have a total return of 6.62% on 1 ETF and 3.85% on a 2nd one. Did I have to go through Stash to invest….no….but I am not disappointed so far.
Anthony says
The concern I have is that Stash doesn’t do dollar cost averaging. I have been putting money into Stash regularly for almost a year now and my account sometimes goes up but mostly down based on the current quote for the day even though I have been buying fractional shares for almost a year now even when the ETF was LOWER in price most of the time, The ETF I bought into around a year ago has been steadily going up. So the numbers don’t add up. Also when I emailed them about DCA (dollar cost averaging) and why wasn’t it reflected in my investing account they never got back with me, hmmmm.
Robert Farrington says
Dollar cost averaging isn’t something Stash does, but it’s what you do by investing at regular intervals.
DCA simply means instead of investing $1,200 once a year, you invest $100/mo for twelve months.
You might find this helpful: https://thecollegeinvestor.com/1332/invest-lump-sum-small-chunks-dollar-cost-averaging/
Phil says
I really like Stash and use it in conjunction with my TD Ameritrade brokerage account. Stash is really good for when I want to purchase common shares of a company (i.e. Coca-Cola, GM, etc.) at bi-weekly intervals. I’d rather pay $1/month to purchase partial shares of many companies at a time (of my choosing) instead of $6.95/trade at TD Ameritrade. If TD Ameritrade and E-trade didn’t charge so much for trades, then I’d be using my brokerage accounts with them.
The real downside I see with Stash, and think is a complete ripoff, is their Roth IRA: Stash retire. Most people can invest in a Roth IRA directly from their employer’s retirement investment servicer (Vanguard, T Rowe Price, etc.) for free. I like how start ups like Stash are offering services for people who don’t have $10,000 to open a brokerage with the big guys.
Robert Farrington says
For buying individual shares of stock, you should consider Robinhood. Commission free investing.
On the flip side, if you’re going for index funds, look at TD’s commission free list. They have some awesome funds on there that don’t cost any commissions to invest in.
Shari D. Possien says
Good luck if you want to close your account with them. I closed/cancelled mine a year ago and today they took out another unauthorized fee from my checking account. Next step…a letter to the NEW YORK STATE’S ATTORNEY GENERAL telling him about the fraudulent practices. I have done this in the past with other businesses, and you do get results. Also, contact the New York Dept. of Consumer Affairs.
John says
Robert, thank you for starting this post. This is very informative. Not just your post but I’m learning from other in this blog also. I’m new to investing. Only have a little money saved from last employer. Self employed as of now and nearing retirement age. So started personal invest to build or add to that for extra income for retirement. I’m nearing the $5000 threshold with stash. I am super busy and don’t have time to manage my (small) investment. Fees for stash is high but it’s so convenient. Does either of the other investment accounts does the deductions and invest automatically for you like stash?
Robert Farrington says
Congrats on building “your Stash”. Anyway, you might consider a robo-advisor that gives you better guidance (in our opinion) for the same cost. Check this out: Betterment Review. As you approach retirement, you might also benefit from using their CFP services to discuss how you’re doing.
P. Davis says
If you try to close your account, they make it very difficult for you. Customer service is horrible, and clueless. They just want your money, and they cannot care any less about you. Do yourself a favor, and do not give them access to your bank account. File complaints with the Better Business Bureau.
Raul Torres says
The STASH app has recently been updated (the screenshots in this article are no longer valid) and the new changes are horrible . Before i was able to navigate fairly easily and now its like pulling teeth. I was able to easily see an overview of all my set deductions and make changes easily but now its so confusing . Plus somehow along the way all my deductions are no longer showing up. At one point i had over $100 a month being deducted and now what i was told i only have $10 set to be deducted monthly . There is no number to call only email for concerns which makes it even more frustrating