Stash
by Mel
Nov 14, 2022 |
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Stash is an American financial technology and financial services company based in New York City operating both a web platform and mobile app which allows users to incrementally invest small amounts in their chosen ETFs, stocks, and bonds. Best for beginner and thematic investors as well as those with modest salaries.
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Summary
Stash is an American financial technology and financial services company based in New York City operating both a web platform and mobile app which allows users to incrementally invest small amounts in their chosen ETFs, stocks, and bonds. Best for beginner and thematic investors as well as those with modest salaries, Stash is an easy, low-risk way to start an investment portfolio.
What You Get
Millions of people around the world share this particular frustration—that of being interested in investment opportunities but having neither the knowledge of how to start nor the significant amounts of cash needed to invest.
It’s precisely for these first-time, young new investors that Stash was created. Founded in 2015 by a couple of Wall Street brokers disillusioned by how most financial systems can be fundamentally unfair to smaller investors, making it difficult to even start; Stash is a financial technology (fintech) and services platform/app that allows primarily first-time investors to incrementally invest small amounts in the exchange-traded funds (ETFs), stocks, and bonds they prefer.
Since then—with 4.3 million users and $2.5 billion invested later—Stash has carved out a niche for itself in the crowded world of fintech as an ideal micro-investing platform for people who don’t just want to invest, but want to invest in something they believe in – people who believe their portfolio should be an extension of who they are and what they value, and are willing to pay a small premium for that privilege.
Stash is part of a wave of fintech startups —including the likes of Monevo, Robinhood, Acorns, YieldStreet, and Revolut— that have tapped into the popularity of apps and the advent of new financial services technology to democratize how individuals can save, spend, invest, borrow and lend money, moving many of those operations and transactions out of the hands of the big incumbent players who used to control them.
Ultimately, the aim of Stash is to present a way for ordinary, modestly-salaried people not only to potentially make money, but to be better engaged in how financial systems work. Through the Stash web platform and mobile apps for Android and iOs, users can invest as little as $5 increments into fractional shares of more than 1,800 stocks and ETFs. Users can invest in personal brokerage accounts, retirement accounts, Roth IRAs, traditional IRAs, and custodial accounts.
To start investing with Stash, simply sign-up by visiting their Stash.com website or downloading the Stash App, available for both iOS and Android and take a few minutes to set up an account by creating a password and sharing your email address and some information about yourself such as legal name, date of birth, and SSN.
After you verify your identity, you’ll be asked to complete a questionnaire. The goal of the questionnaire is to determine your risk tolerance for your future investments: conservative, moderate, and aggressive. After you are placed into the best category for your financial situation and personal preferences, you will receive a selection of recommended investments where you can read a synopsis of what the investment is all about, including a bar visualization that represents the level of risk; the ticker symbol, last price and expense ratio (for ETFs); a list of the investment’s holdings; social insights; and ETF thematic investing and mission-driven groupings (for Beliefs, Balance and Life).
For more guidance, Stash's Portfolio Builder will serve up a list of suggested ETFs that, together, represent a diversified investment portfolio suitable to your profile. You can invest in that portfolio, or you can remove or add investments as you see fit. The portfolios are built out of ETFs, but Stash offers individual stocks, too. More than 1,800 ETFs and stocks are available on the app, including popular high-yielding ones like Apple and Costco.
Some additional features of Stash that you can take advantage of (depending on your subscription package) include:
Banking Tools such as a Stash Online Bank Account that works seamlessly with your investment accounts and can earn you stock when you spend with Stock-Back and Direct Deposit where you can have your paycheck deposited by your employee directly into your Stash Bank Account which can allow you to get paid up to 2 days early--with no overdraft‖, minimum balance, set-up or hidden fees. What’s more, Stash will even give you a $50 bonus to go into your investment once your first deposit hits.
Easy, affordable Investment Opportunities where you can invest with just $1 or less using Stash’s zero account minimum. That low minimum is made possible by fractional shares of stocks, bonds, and ETFs with no add-on trading commissions wherein Stash buys the ETFs and stocks, then splits them among its investors. That means you can build a diversified portfolio with very little money.
Stash also offers personal, retirement, and custodial (for children under 18) investing accounts.
Use Stock-Back to build your portfolio while you shop. Earn stock rewards from your go-to brands, just by swiping your Stash card. Stash offers a 0.125% reward to members who subscribe to the $1/month or $3/month account options (those with the $9/month plan get twice that.) Stash also offers bonus rewards such as a 2% reward on publicly traded stocks or rewards invested in a diversified ETF.
Stash Budgeting + Saving tools offer new ways to organize and save money automatically, such as their SmartStash feature that analyzes your bank account’s ebbs and flows and, if it finds some extra money in there, will sweep it into your savings.
Stash's dividend reinvestment program, or DRIP, meanwhile, lets you automatically reinvest any dividends that your investments pay out as a smart way to grow your savings. The DRIP is available for all of Stash's account types.
Stash's debit feature called Partitions, furthermore, allows users to put money earmarked for different expenses and goals into separate buckets within the larger account. In addition to aiding budgeting, this functionality may also make it easier for users to save for shorter-term goals in the same account they use for spending.
With Stash Learn, Stash Coach and Stash Way, members can get personalized advice, articles, news, guides, and tips to help you build better financial habits, save more, and budget smarter.
Terms
Stash offers three (3) subscription plans to best suit your individual investment needs:
Stash Beginner ($1/month) for the personal finance novice learning to invest and budget. Includes: Personal investment account & bank account access.
Stash Growth ($3/month) for the long-term saver and investor with goals in mind. Includes: Everything in Beginner plus a retirement account.
Stash+ ($9/month) for the savvy investor and debit card spender looking to maximize their Stash. Includes: Everything in Growth plus 2 custodial accounts, metal debit card, 2x Stock-Back rewards, and monthly market insights report.
As for average returns on investment, expense ratios average 0.23% for ETFs (0.34% for ETFs that focus on socially responsible investments). In addition, there is no investment fee collected for stocks as well as no annual or inactivity fees. Stash, however, does collect a $75 fee for every outgoing transfer.
As for security, Stash is a registered investment advisor with the US Securities and Exchange Commission (SEC). Stash’s investments, moreover, are held by their partner and custodian Apex Clearing Corporation, a third-party SEC-registered broker-dealer and member FINRA/SIPC. Apex Clearing is a member of the Securities Investor Protection Corporation (SIPC). This means the investments in your Stash account are protected up to $500,000 total (including $250,000 for claims for cash)
As for personal data security, Stash uses 256-bit encryption to protect and secure all of client information, from personal data (like your SSN) to your transaction history. They also make use of additional security tools such as TLS, biometric recognition, access control, and bug bounty protection for their app.
Trustworthiness
Reviews for Stash are generally positive with media companies such as CNBC praising the app's easy to use features and automation in 2018. In January 2019, NerdWallet stated that Stash was good for new investors and those wanting guidance (but that the $1 fee for accounts under $5000 was high for lower balances as a percentage of assets and that other services could offer more value).
On the negative side, sign-up conditions transparency needs improvement particularly with regard to deposit amount minimums and expense ratios. As part of signing up, the app asks you to commit to a regular deposit amount, though you can immediately opt out of that amount. This request occurs before you even know the potential investment options or what they cost.
Conclusion
One of the best fintech companies for inexperienced people to learn about investing, Stash aims to make the process of investing approachable for beginners, especially with its $0 account minimum, variety of low-risk investment opportunities, and affordable monthly subscription fees. If you’re a newbie looking for a little hand-holding while you slowly and incrementally build a portfolio of stocks and ETFs, Stash may be the safest investment start for you.
Stash Blog
New Site Added: Stash
by Mel
Nov 14, 2022
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