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. What's more, you can get started with as little as $5, then add to your portfolio on a regular basis.

Our Stash Invest Review

Based in New York City, and founded only in 2015, Stash Invest already has 2.7 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.

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:

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 Features and Benefits

Stash Invest Fees. The fee is just $1 per month, and the first month is managed free. Once your account balance reaches $5,000, the annual fee is 0.25%, which is comparable to the lowest priced competitors, like Betterment and Wealthfront.

Fees for Stash Retire are $2 per month, up to an account balance of $5,000, when the annual fee of 0.25% applies. Stash Retire fees are waived if you’re under 25.

Auto-Stash. This feature enables you to make regular automatic contributions to your account, on a weekly or monthly basis.

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.

Stash: Automatic Investing Price: 1st month free, then $1 per month Stash is our most popular automatic investing app for beginning investors. No minimums. Buy partial shares. Stash: Automatic Investing

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.

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 Retire

Just as the name implies, Stash Retire is the Stash IRA edition. Like Stash Invest, you need just $5 to start a Stash Retire account. It’s available for both traditional and Roth IRA accounts.

Since Stash Retire is so new, it isn't set up to do an IRA rollover from either another IRA or an employer-sponsored retirement plan at this time. But they promise they’re working on adding that capacity in the near future.

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: What’s Coming Next

Stash Invest is about to launch their banking services. According to Sperling, they already have more than 80,000 people lined up with deposits, waiting for the official release.

When the service is available, it’ll be free to use, have no minimum account balance requirement, and no overdraft or ATM fees. You'll be able to access your funds through more than 19,000 ATM's available at common outlets, such as Walgreens and CVS stores.

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.”

Once launched, the banking service will be offering cash back, with automatic offers at available merchants. In fact, you’ll be able to get up to 10% cash back at more than 10,000 merchants nationwide.

Stay tuned…

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

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.
  • There are no fees for a Stash Retire account if you’re under 25.
  • 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 will give you easy and free access to your account at thousands of ATMs across the country, as well as provide 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. The $1 per month fee on a $1,000 account balance is $12 per year, or 1.2%. On retirement accounts it’s $2 per month, or 2.4% on a $1,000 account balance. Fees drop to a very competitive 0.25% once you reach $5,000.
  • 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 $5,000, the fees are competitive with robo-advisors.

If you're under 25, it might be best to start with Stash Retire, where you can open a traditional or Roth IRA with no annual management fee.

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

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  1. rishi trivedi says:

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