Start Investing for Only $5 with Stash Invest (Our Review)

 

Many people have trouble getting started investing. There are often high balance requirements that make it difficult to even open an account, let alone actually start investing.

If you’ve been having difficulty getting out of the investment starting gate, you can get plenty of help through an app known as Stash Invest.

Stash will enable you to invest in fully constructed investment portfolios that are consistent with your own investment preferences and values. You can get started with as little as $5, then add to your portfolio on a regular basis through features like Round-Ups, Set Schedule, and Smart Stash. And with Stash Banking, you’ll get access to a fee-free debit card that earns you Stock-Back Rewards.

If you want to learn more about Stash Invest has to offer, continue reading our full Stash Invest review.

Our Stash Invest Review

Based in New York City, and founded only in 2015, Stash Invest already has 3.5 million users. The service is an app designed to help people save and invest money. In the company’s short history, they’ve moved from basic investment accounts to adding retirement and custodial accounts.

Stash Invest is on a mission to provide financial opportunity to all, (with the belief) that every American should have the tools, guidance, and confidence needed to grow personal wealth and live a better life.”

The company has been receiving high praise in the business community:

How Stash Invest Works

Stash Invest is an investment app that enables you to get started investing. You can open an account and begin investing with as little as $5. Because the app enables you to invest in fractional shares, you don’t need to have a large initial deposit to begin building your investment portfolio.

You can continue making contributions to the app, or set up regular contributions through Auto-Stash. You can build your account from a selection of both stocks and exchange-traded funds (ETFs), and even choose the type of investment category you want to focus on. For example, you can choose to concentrate your investments on improving the environment, or one of several other categories.

The process starts by completing a one-page questionnaire. There you establish your investment preference, the type of companies you want to invest in, and what your specific savings goal is. You also provide some general information that helps Stash Invest determine your investor profile.

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You can choose between three different investment styles, conservative, moderate, and aggressive. Based on the screenshot above, in selecting a moderate risk tolerance, the app provides the following investment suggestions:

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Since Stash Invest targets new and small investors, it also has a large library of educational resources, through the “Learn” tab. Stash Invest wants to educate you on the intricacies of money and investing, so they offer topics such as market news, love and money, technology, money lessons, and even careers.

Take action: Get started with Stash Invest.

Stash Invest Pricing

Stash has three levels of service; Beginner, Growth, and Stash+.

The Beginner level costs $1 a month and includes a personal investment account, a debit card for easy access, the earn Stock-Back plan, and free financial education. 

The Growth level costs $3 a month and includes everything in the Beginner level plus tax-advantaged plans.

The Stash+ level costs $9 per month and includes everything in the Growth level plus the ability to open accounts for your kids, monthly market insight reports, and your debit card is metal. You also get double rewards in the Stock-Back program. 

Stash Invest Features

Here’s a quick list of the best features that Stash has to offer.

Auto-Stash

Auto-Stash is a suite of tools that make it easy for you to save and invest money automatically. Stash recently revamped their Aut0-Stash product by adding in three new features: Round-Ups, Set Schedule, and Smart Stash.

Round-Ups

Roundups are like Stash’s version of saving your spare change. Once Round-Ups have been enabled, Stash will look at all the purchases that you make with your linked debit card and round them up to the nearest dollar.

For instance, let’s say you bought a coffee for $2.12. With Roundups, Stash would put 88 cents aside. And once your Round-Up balance hits $5, Stash will automatically transfer the funds to your investment account. At this point, Round-Ups can only be transferred to your cash balance. But from there, you’re free to invest the money where you’d like.

Set Schedule

Set Schedule makes it easy to set up recurring transfers from your bank account to Stash. Stash allows you to decide how much you want to set aside with each transfer and how often you want them to be made.

Set Schedule even allows you to tell Stash which ETFs or stocks you’d like for the money to be invested in. Or the money can sit in your cash balance account until you’re ready to invest it yourself. Set Schedule can be turned on, off, or paused at any time through the Stash app or website.

Smart Stash

Smart Stash is one of the most interesting tools inside the Auto-Stash suite. By analyzing your spending patterns, Smart Stash is able to identify times when you’ll have money left to save. Smart Stash takes everything into account — from your typical monthly income, to your average spending on things like groceries and gas.

Based on your income and expenses, Smart Stash will gauge how much you could afford to save. Once you’ve accumulated at least $5, it can schedule an automatic transfer from your linked bank account to your Stash cash balance. 

You can tell Smart Stash to transfer funds in increments of $5, $10, or $25. Smart Stash will never initiate transfers that are larger than the maximum you’ve set.

Stash Coach

As part of your Stash Invest service, you’ll have an automated “coach” that can help provide you with a guided investment experience. The coach presents you with a number of challenges based on your risk profile.

You earn points for each challenge that you complete and then you receive guidance and feedback on how well you’re working toward becoming a well-balanced, diversified investor.

Withdrawing Funds From Stash Invest

Funds are available for withdrawal once they have been in your account for at least five business days. To withdraw funds, you’ll have to sell shares, which may also result in a capital gain. A sell order will take two business days for the funds to settle in your account. Once they do, they’ll be available for transfer to your bank account.

Stash Invest Security: Funds held in your Stash Invest account are insured by SIPIC, for up to $500,000, including up to $250,000 in cash balances. This coverage is for broker failure, and not for losses due to market factors.

For app security, they use 256-bit encryption and Secure Socket Level (SSL) to protect your information.

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Stash Invest Investment Methodology

Stash Invest uses investment themes–individual portfolios built around a particular investment concept. Each theme includes one ETF, and several individual stocks.

ETF’s are chosen based on expense ratios, trading liquidity, and risk profiles. The app currently uses more than 40 ETFs in the construction of its investment themes.

They also work with well over 100 individual stocks. Those include some of the biggest names on the market, including Alibaba, Alphabet, Amazon, Apple, Bank of America, Boeing, Chevron, Cisco, Citigroup, Comcast, Costco, Dow DuPont, ExxonMobil, Facebook, Ford, GM, Home Depot, IBM, Intel, Intuit, JP Morgan, Johnson & Johnson, McDonald’s, Microsoft, Netflix, PayPal, Procter & Gamble, Starbucks, Target, Tesla, Coca-Cola, Walmart, and The Walt Disney Company.

And once again, any of these stocks can be included in a theme through the use of fractional shares.

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There are more than 50 themes, including:

  • Blue Chips. Includes the Vanguard Mega Cap Fund ETF (MGC), plus Apple, Microsoft, Facebook, Amazon and other stocks.
  • Clean & Green. Includes iShares Global Clean Energy ETF (ICLM), plus First Solar Inc., China Everbright, Contact Energy, and other stocks.
  • Woman Who Lead. Includes State Street Gender Diversity Index ETF (SHE), plus Coca-Cola, McDonald’s, IBM, Mastercard, Pepsico, and other companies with women in leadership roles.
  • Corporate Cannabis. Includes ETFMG Alternative Harvest ETF (MJ), plus Cronos Group, Aurora Cannabis Company, Canopy Growth, and other stocks.
  • Modern Meds. Includes SPDR S&P Biotech ETF (XBI), Ariad Pharmaceuticals, Clovis Oncology, Arcadia Pharmaceuticals, Vertex Pharmaceuticals, and other companies on the cutting edge of medical advances.

Your account is actually held through Apex Clearing Corporation, a third-party SEC registered broker dealer and member of both in FINRA and SIPIC.

With the use of themes, Stash Invest is set up to discourage trading. Instead, they emphasize the buy-and-hold approach.

Stash Custodial

You can open a custodial account through Stash Invest for a minor child. The account can be maintained until the child reaches the age of majority, which is either 18 or 21, depending on the laws in your state. As custodian, you can fund the account, and the funds can only be used for the benefit of the minor. This includes education, childcare, and other expenses.

As the parent custodian, you’ll have full control over the account. You can choose the investments in the account, as well as the spending activity. But it’s also an excellent way to introduce your child to investing. For example, you can let your child help you choose investments held in the account, as well as to watch the progress as they grow.

This is a way to give your child a jumpstart into investing. We recently attended Money2020 and spoke briefly with Dale Sperling, Stash Invest’s Chief Marketing Officer. Dale shared,

“No one is teaching kids about money. Where else will they have a chance to manage their own money?”

Stash Invest Custodial accounts are providing that opportunity.

Your child can also spend using the app. But as a control measure, and since a minor is not of legal age to transact business, all spending will need to be approved by you. It’s a way to also help your child learn the merits of responsible spending.

Stash Banking

Stash Invest has recently launched their banking services. This gives you a debit card that will allow you to access the funds in your Stash account at an ATM. 

Fee-Free

It’s free to use, has no minimum account balance requirement, and no overdraft or ATM fees. And you can access your funds through more than 19,000 ATM’s available at common outlets, such as Walgreens and CVS stores.

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The free ATM feature is especially important. According to Sperling,

“Some of our customers pay over 25% of their ATM withdrawals in bank fees that they don’t even notice. If we can keep our customers informed, we can help them avoid those fees, giving them more money to invest.”

Get Paid Early

Would you like to get your paycheck faster? Who wouldn’t right?

With Stash’s bank account, you might just be able to.  Once you open a Stash bank account, they allow you to get paid up to two days ahead of schedule. All you have to do is set up direct deposit and Stash will start sending your paycheck up to two days earlier than other banks.

Stock-Back Rewards

Everyone’s heard of cash back and points cards. But the Stash debit card comes with rewards that are entirely different. Through their patent-pending Stock-Back Rewards program, Stash is able to offer stocks and funds as rewards to their Stash debit cardholders.

Stash Invest Review

Here’s how it works. When you spend at companies that have stock on Stash’s platform (i.e. Starbucks, Amazon, Walmart and more), you’ll earn Stock-Back Rewards for those companies. And when you shop at a mom-and-pop store in town, Stash will reward you with a diversified fund. Every purchase earns at least 0.125% Stock-Back rewards, but you can earn up to 5% Stock-Back rewards when you spend at companies that offer bonuses.

How to Sign Up for the Stash Invest App

You can sign up for Stash Invest either on the website or through the Stash Mobile App.

You’ll start by providing your email and creating a password, to create your account. You’ll then provide your investor profile, as well as personal information. Finally, you’ll fund your account by linking your bank account to the app.

The application process takes only two minutes, and once you add $5 to the app, you can choose your first investment from the themes recommended by the app.

The Stash Mobile App is available for Android devices, version 5.0 and up, at Google Play. It’s also available for iOS devices, versions 10.0 and later, at the App Store.

Stash Invest Pros and Cons

Let’s take a look at the benefits and drawbacks of Stash Invest.

Stash Invest Pros:

  • Stash Invest enables you to invest with as little as $5, which is perfect for new and small investors. In fact, you can invest in a fully diversified portfolio since the app uses fractional shares.
  • Investment themes are “pre-packaged”, so all you need to do is choose one that fits your personal preference, and begin investing.
  • Your account can be funded with regular automatic deposits, making saving and investing both effortless and invisible.
  • Custodial accounts are the perfect way to begin educating your children about investing, so they’ll already be in the habit by the time they become adults.
  • Stash Banking Services gives you easy and free access to your account at thousands of ATMs across the country. And it provides generous cashback offers from thousands of merchants.

Stash Invest Cons:

  • Stash Invest isn’t a robo-advisor. It does not offer direct account management, such as automatic rebalancing or dividend reinvesting.
  • Fees on lower account balances are high. On the Beginner plan, the $1 per month is $12 per year. Assuming a $1,000 balance this equals 1.2%. On the Growth accounts it’s $3 per month, or $36 per year. On a $1,000 account balance that’s a 3.6% fee. Fees on the Growth plan drop to a more competitive 0.36% once you reach $10,000. 
  • There’s no provision for IRA rollovers at the present time.
  • Stash Coach is an automated system, not a human investment advisor.

Should You Sign Up with Stash Invest?

Stash Invest is an excellent choice for anyone who has had difficulty getting started with investing. You can sign up for the app in a matter of minutes, and begin investing with as little as $5. From there, you can continue to fund your account in small increments, through automatic deposits.

The fee structure is uncomfortably high on small accounts. For example, on an account balance of $100, a $1 per month fee–$12 per year–is steep. But that should motivate you to build up your account balance as quickly as possible. Once you reach $10,000, the fees are competitive with robo-advisors.

The theme-based investment strategy also enables you to invest in a way that’s consistent with your personal values. Most investment platforms that enable you to do that require much higher minimums.

Stash Invest is the perfect platform to begin your investment journey in life, which by itself is critical. Just getting on the investment track is literally life-changing, and Stash Invest will help you do just that.

If you’d like more information, or if you’d like to sign up for the app, check out the Stash Invest website.

Up Next: Compare Stash with Acorns. Read our Acorns Review

Comments

  1. rishi trivedi says

    very systmatic and helpful app to use, i need to try it