Stockpile Review: Stock Giftcards and Fractional Shares

Stockpile puts a unique twist on purchasing stocks. Instead of buying stocks directly, you purchase a stock gift card.

This is better than giving a toy or something else your son or daughter will eventually outgrow.

Owning fractional shares in popular companies like Amazon, Coca-Cola, Netflix and more will let them watch their value grow over the years.

To encourage younger people to participate, Stockpile has gamified the process of buying stocks. If you aren’t familiar with gamification, it’s simply a way of providing incentives for people to use different parts of a website or app. 

For example, LinkedIn provides progress indicators that show how much of your profile has been filled out. You can’t ever reach 100% though, which keeps people trying to optimize their profiles.

Instead of giving someone stock, which can be difficult, you simply give them a stock gift card. In this article, we’ll see how the process works.

How To Purchase A Stock Giftcard

If you want to give a stock gift card to someone, you’ll first need to open an account with Stockpile. Once your account is open, you’ll need a way to deposit funds into it. 

This can be done by linking your bank account or by using a credit card or debit card.

Next, purchase a stock gift card. E-cards have face values of $10, $25, $50, $100 or any other amount. You can purchase a physical, plastic card, which cost a little more than an e-card.

If your giving the card as a gift, a physical card is probably better than a e-card. They also look cool, as shown below.

After giving your gift card to the recipient, to use it, they’ll need to create a Stockpile account as well. This is where the process could go a little smoother since you are basically opening a brokerage account. 

If the recipient is a minor, they’re parents or legal guardian will need to open the account for them, since a custodian is required for minors. The minor’s name can be on the account and they can still use it.

When the time comes, if the recipient wants to sell the stock, they’ll pay a small fee of only $0.99.

Buy Fractional Shares

Rather than paying over $1,000 for a share of Amazon, you can buy it for only $50. You’ll then own a fractional share of Amazon stock. 0.05 of a share to be exact. 

While your stock won’t go up as much as someone who owns whole shares of Amazon, it will still increase in value. You can also diversify by buying other shares.

Transaction Fees

Fees with Stockpile are fairly competitive. Cheap trading fees aren’t a main selling point for Stockpile. It’s the use of a gift card to buy stock. That being said, let’s look at the various fees involved.

The purchaser incurs the most fees. After all, if you are receiving a gift card that has a face value of $50, you’d be disappointed if $5 was taken right off the bat for various fees.

The e-card or e-gift fee as Stockpile calls it, is $2.99 for the first stock. There is also a 3% credit/debit card fee. On a $50 gift card, the 3% amounts to $1.50. That's a total of $4.49. The higher the face value of the gift card, the more you’ll pay in fees because of the 3% fee.

Physical cards cost more than e-gifts. For the same $50 face value stock, the cost is $56.95. That’s $4.49 for an e-card vs. $6.95 for a plastic card. Physical cards are restricted to three dominations:

• $25 ($29.95 after fees)
• $50 ($56.95 after fees)
• $100 ($107.95 after fees)

Shipping is also charged for physical cards. If you buy three or more cards, shipping is free.

For physical cards, fees are on the higher side compared to other low cost brokerage firms. But it’s all about the novelty of giving stocks as a gift card.

Plus, physical cards wrapped in a box are sure to have a more positive impact than an e-gift in someone’s email inbox or printed out on paper.

Investment Education

Stockpile offers a number of ways to learn about investing. From resources available on their website to actual use of their apps (available on the iPhone and Android).

When using the app, you can watch your investments grow, see trends and choose from top growth stocks, top dividend payers, upcoming earnings and more. All meant to help you become a better investor.

Stock Availability

The number of stocks available on Stockpile is a little restrictive. From their website, “Our universe includes more than 1000 stocks, ADRs, and ETFs, including every stock in the S&P 500.”

That might seem like a lot but there are thousands of stocks and ETFs available on the exchanges. Bonds and options aren’t available with Stockpile.

Also, Stockpile isn’t real-time trading. Trades are instead executed near the end of the day.

Final Thoughts

The focus is Stockpile isn’t to be the best discount brokerage. Instead, it is all about gifting stocks through gift cards. You can even purchase them in a limited number of physical stores.

The idea of giving someone a stock gift card is great for younger people who are use to such simple concepts, rather than wading through the process of opening a brokerage account.

Additionally, they’ll learn to be better investors through all the investment education Stockpile provides.

Would you ever purchase a Stockpile gift card?