This Stash Invest review includes updated features and pricing for 2021.
Whenever I talk to people who haven’t started investing, they usually have a few reasons why.
“I don’t feel like I’ve got enough money to make a substantial investment.”
“Investing sounds really confusing.”
“I don’t know how I would pick my investments.”
With Stash, you can start investing with as little as $5. The app is easy-to-use with strong educational content. Stash offers themed ETFs, so you can invest in areas and companies with goals and ideals that match your own.
Stash is breaking down the barriers built by traditional investing, but is it the best way to invest your money?
What is Stash Invest?
Launched in 2015, Stash Invest was created to “make investing easy and affordable for everyone.” The founders of Stash recognized a problem that traditional investing platforms and companies weren’t accessible for the majority of Americans.
Stash Invest wants to take down the barriers to traditional investing – cost, level of difficulty, and just being out of touch with everyday folks.
To remove those barriers, Stash Invest is a micro-investing app which means you can invest with very small amounts of money, literally spare change. Instead of buying full shares of stocks or ETFs, you are investing in fractional shares.
Not only can you start investing for $5 or less, but Stash also helps you choose which investments to add to your portfolio, or you can add investments to your portfolio based on your interests and values.
This is an appealing way for new investors to start, and 86% of Stashers are first-time investors. In total, the 5 million Stash users have invested and saved over $1.8 billion.
Stash has personal investment accounts, retirement accounts, custodial investment accounts for your children, and online banking. It’s also rich in educational content to help you learn as you go.
All of this sounds really good, but my Stash Invest review is going to dig into specifics to help you decide if Stash Invest is worth it or not.
Stash fees and pricing
Stash has three different account options starting at $1/month.
- Beginner – $1/month. This account includes a personal investment account, unlimited trades, debit card access, the Stock-Back program, financial education, and a $1,000 life insurance policy offered through Avibra.
- Growth – $3/month. Everything in the Beginner account plus a tax-advantaged retirement account.
- Stash+ – $9/month. Includes everything in Growth plus custodial accounts for up to two children. You’ll receive a monthly market insights report, a Stash debit card with 2x Stock-Back, and a $10,000 life insurance policy through Avibra.
These are flat monthly fees, unlike a percentage of AUM (asset under management) that traditional brokerages charge.
If you’ve been researching micro-investing apps, Stash fees are comparable to Acorns for the first two options Beginner and Growth. Both charge $1/month for personal investment accounts and $3/month to add a tax-advantaged retirement account. Stash includes banking in both Beginner and Growth plans, but Acorns doesn’t add banking until you get to the $3/month plan.Acorns’ top tier plan is only $5/month compared to Stash’s $9/month. Stash’s $10,000 life insurance plan is a major difference between the two apps.
5 steps to start investing with Stash
The Stash Invest app is known for offering a really positive user experience. Signing up and starting to invest is simple, takes just a few minutes, and the app walks you through it all.
Step 1: Click here to sign up for Stash
You sign up for Stash using your email address and create a secure password.
Step 2: Fill out your Stash investment portfolio
When you sign up for Stash, you’ll need to share your name and birthday, Social Security number, employment information, annual income, and net worth.
This is the same kind of information that any other investing app is going to ask for. It helps Stash determine whether your risk tolerance is conservative, moderate, or aggressive. This is how Stash recommends investments.
Step 3: Pick your first investment
Based on your risk tolerance, Stash will recommend a first investment that matches your risk tolerance.
For example, if Stash recommends a conservative portfolio, they’ll show you conservative investments like the one below, Match the Market. You can look at its historical performance and price, and because this is an ETF (exchange-traded fund), you can scroll down to see which assets it includes.
If you want to buy it, just click that big “Buy” button at the bottom of the screen.
Stash organizes its investment options based on themes, like Clean and Green (energy sources like solar and wind) or Home Sweet Home (American home building firm). You’ll see the risk tolerance of each, cost, history, and what’s in each ETF.
Further down in my Stash Invest review I’m going to explain the way Stash names and organizes these thematic investment options. It’s pretty unique and very approachable for new investors.
Step 4: Add your funding source
Your funding source is your bank account. You connect it to your Stash account so you can complete your first investment.
Stash will pull funds from your link bank account to purchase each investment, and you can connect a different funding source whenever you want.
Step 5: Confirm your identity
Stash sends an email to the account you used to sign up, and you will need to click on that email to verify who you are and finalize everything. You’ll also be asked to create a 4-digit pin that you’ll use to log into your Stash Invest app.
How to continue investing with Stash
Investing regularly is one key to a healthy investment strategy, and Stash automates routine investments with three options: Set Schedule, Round-Ups, DRIP (dividend reinvestment program), and Stash’s Stock-Back card.
Scheduling deposits into your Stash account is the fastest way to grow your balance. You decide how much you want to transfer into your Stash account and if you want to that on a weekly or monthly schedule.
Stash saves transferred funds as a cash balance that still needs to be invested. But you can eliminate that step by setting a schedule for individual investments.
You tell Stash how much of each ETF or stock to buy and when, and then Stash automatically purchases them for you on a schedule. You can see an example of that below:
Round-ups are unique to the world of micro-investing and micro-savings apps, and it’s also known as spare change investing.
Investing with Stash Round-Ups works like this: any time you make a purchase with the debit or credit card that’s attached to your linked account, Stash rounds that transaction to the next dollar amount and invests the difference.
Here’s an example: spend $4.37 on a latte, Stash will round that up to $5, and transfer the $0.63 difference into your Stash account. You can pick how to invest your Round-Ups once you hit $5.
You can track your Round-Up balance in the Stash app, and you can also pause Round-Ups whenever you want.
DRIP (Dividend Reinvestment Program)
For investments that pay dividends, you can opt in to this program to automatically reinvest dividends back into more shares of the same investments. This can help you build your long-term growth and returns.
Stash Stock-Back card
Each Stash account type lets you set up a free Stash checking account through Green Dot bank. Then Stash will send you their Stock-Back card.
You can earn stock with every purchase you make with Stash’s Stock-Back card. It’s similar to earning credit card rewards points, except you’re given micro-share of stocks or ETFs instead of points. A little further down in my Stash invest review, you’ll learn more about how the Stock-Back card works.
Thematic investing with the Stash app
What Stash has become so well-known for is thematic investing. This is unique to Stash, and it’s a beginner beginner-friendly browse for investments.
Interested in investing in the tech industry or socially and environmentally conscious companies, there’s an easy way to find those investments.
You can see in those screenshots that Stash gives you a name for each investment and performance over the past year. The names aren’t the official names for each ETF – Stash rebrands existing ETFs to make them easier to understand.
For example, the official name of Combat Carbon is iShares MSCI ACWI Low Carbon Target ETF, ticker symbol CRBN. And, the official name for Internet Titans First Trust Dow Jones Internet Index Fund, ticker symbol FDN.
You can see how these themed names are much easier to digest.
Below are a few more themed investments offered by Stash:
- American Innovators (U.S. based tech companies) is the Stash name for Vanguard Information Technology ETF, ticker symbol VGT
- Women Who Lead (female-focused companies, leadership, and charitable work) is the Stash name for SPDR SSGA Gender Diversity Index ETF, ticker symbol SHE
- All That Glitters (precious metals) is the Stash name for Aberdeen Standard Physical Precious Metals Basket Shares ETF, ticker symbol GLTR
- Do the Right Thing (companies who focus on positive environmental, social, and/or governance impact) is the Stash name for iShares MSCI USA ESG Select Fund, ticker symbol SUSA
- Data Defenders: (cybersecurity companies) is the Stash name for First Trust NASDAQ CEA Cybersecurity ETF, ticker symbol CIBR
Stash gives you a lot of information about each ETF, from exactly what’s in each fund, expense ratio, dividend yield, when the last dividend was paid, etc. There’s also a link to each fund’s website if you want more information that Stash investing gives you.
Besides making it easier to understand what you’re investing in, thematic investing also introduces you to what’s referred to as socially responsible investing (SRI) or ESG investing (environmental, social, governance).
Both are the practice of investing in companies that exemplify your social, environmental, or governance beliefs.
This is a very millennial-friendly investment strategy, with 9 out of 10 millennials interested in SRI, and over 50% of millennials are already investing this way according to USA Today.
To meet that interest, even big investment firms like Charles Schwab and Vanguard have created funds and options to financially back your beliefs.
Stash retirement accounts
If you’re enrolled in the Stash’s Growth or Stash+ plan, you can set up and invest in a Roth or Traditional IRA. These are tax-advantaged retirement funds.
Stash will track your progress towards reaching the maximum IRA contribution limit – for 2021, the limit is $6,000 for anyone under 50, and $7,000 if you’re 50 or older.
Retirement investors can use Stash’s retirement calculator to get an estimate of how much you’ll need to save, use the AI-style Stash Coach to give you retirement challenges, and automate your retirement contributions with Auto-Stash (scheduled deposits into your investment account).
Stash Banking & Stock-Back Card
Stash partnered with Green Dot bank to create its own FDIC-insured checking account, and it comes with all of Stash’s plans. It’s an online bank account with zero overdraft fees, monthly maintenance fees, minimum balance fees, and there is access to thousands of fee-free ATMs.
The idea is that having your bank account and investment account held in the same place you’re simplifying things. Think of it as fewer places to check.
Stash Banking also offers holistic financial advice so you can address issues related to spending, saving, and investing.
However, the real benefit to using Stash banking is that you can enroll in Stash’s Stock-Back program. This is a rewards program where you earn money back when you use your Stash branded debit card to shop.
For example, if you use your Stash banking card to make a purchase from Amazon, Stash rewards you with a small percentage of Amazon stock back. You earn stock back on every purchase you make with this card, even if the company isn’t publicly traded.
Say you make a purchase at a local restaurant, Stash will reward you with a fractional share of a Stash-approved ETF.
Depending on the company, you can potentially earn 10% cashback to invest in your purchases. Stash investors enrolled in the Stash+ plan can earn 2x back on their purchases with the Stock-Back card.
Learning to invest with Stash
One of the areas that Stash shines is that it teaches new investors how to invest. Next to the perceived high cost of investing, a lack of knowledge prevents a lot of new investors. The Stash investing platform actively works to break down this barrier.
This educational component is extremely important if you’re picking your own investments, and Stash gives you more control over your investments than the popular Stash alternative, Acorns.
Below are 4 ways the Stash investment app teaches you to invest:
1. Easy access to important information about your investments
For each investment, you can look at the dividend yield, performance, and expense ratio for ETFs. You can also click on a button on any investment and be taken to that investment’s website where you can do even more research.
2. The Stash Coach
This tool is like a personal trainer for your investments. It’s Stash investing’s personalized financial coaching tool that sets challenges, teaches you how to diversify your account, how to set long-term investing goals, and more.
3. Stash Portfolio Builder
For investors that don’t want to pick investments on their own, the Portfolio Builder creates an instantly diverse starter portfolio for you. There are three levels: conservative, moderate, and aggressive.
You can still pick individual investments if you’re using the Portfolio Builder.
4. Learning center
Stash Learn is Stash’s collection of articles and how-to guides that cover topics like investment basics, national and global money news, personal finance issues, etc. Some of the most recent articles include a guide to the 2020 tax season, starting to invest in legal cannabis, and what you need to know about free credit score apps.
The downside of investing with Stash
This has probably sounded like a glowing Stash invest review, and I honestly think they’re doing a great job introducing new investors to the market by breaking down those barriers I mentioned at the beginning of this review: cost, difficulty, and approachability.
However, and this one is big, Stash can be a surprisingly expensive alternative to traditional brokerage.
I know $1/month sounds ridiculously cheap, but when you only have $100 invested, you’re being charged a 1% fee, which is high for brokerages that charge a percentage of assets under management, or AUM. For example, Betterment has a 0.25% annual fee.
As your account balance grows, paying a flat fee can be much more cost-effective, but if you’re relying on spare change investments alone, it will take a long time to get to that break-even point.
We’ve started seeing more and more traditional brokerage doing away with account management fees for personal brokerage accounts and IRAs. Schwab and Fidelity don’t have opening or maintenance fees. Vanguard charges a $20 fee to open a brokerage account, but they’ll waive it if you sign up for their e-delivery service.
The other reason investing with Stash can be more expensive is because when you pick your own investments, you can wind up investing in funds with pretty high expense ratios.
Expense ratios are what the investment company (who created the fund) charges to maintain and operate the fund.
Stash’s average expense ratio is about 0.24%, and that’s marginally higher than other online brokerages like Vanguard. There are some ETFs with much higher expense ratios, like BLOK (an ETF for companies that are developing and utilizing blockchain technology. BLOK’s expense ratio is 0.70%.
There’s also some debate about the long-term effect that socially responsible investing can have on your portfolio. While more and more evidence suggests you can see the same kind of positive growth, there are still concerns that you’ll end up leaving some great investments on the table because you’re less focused on growth.
In the end, you’re going to have to decide if you want to make this part of your investment strategy. You can weigh up the differences and make the right choice for you.
Is Stash legitimate?
Stash Invest is a registered investment advisor with the SEC, which requires that Stash follows federal regulations to protect consumers. Stash has partnered with Apex Clearing corporation to hold and protect your investments up to $500,000.
Stash is also PCI DDS compliant, meaning it’s regularly audited by an external third party to make sure that all technical controls and card data is protected.
Here are a few more security features you get with Stash Invest:
- 256-bit encryption
- Bug bounty program
- Transport Layer Security
- Optional biometric recognition
- Access controls like end-times, log-in thresholds, and two-factor authentication
Stash app review — Pros and cons
Stash shines for several different reasons, but there are also a few things that might not make it a good fit for you.
Alternatives to Stash
Stash should be a strong contender for new investors, and it has features that are unique to Stash — themed investments and micro shares of stocks. Stash Invest also has more educational content than many other investment apps. But if you’re interested in looking at other options, here are two more M$M picks.
Betterment is a robo-advisor that has personal investment accounts, retirement accounts (Traditional and Roth IRAs and 401(k) rollovers), and cash savings. Betterment offers daily tax-loss harvesting, access to a tax impact tool, and extended portfolio options.
Betterment has two levels of service: Betterment Digital is 0.25% annually or 0.15% once your account hits $2 million, and Betterment Premium is 0.40% annually ($100,000 account minimum) or 0.30% once your account hits $2 million. Premium includes unlimited access to Betterment’s Certified Financial Planners.
Acorns is part micro-investing app and part robo-advisor. You can fund your account with Round-Ups, Found Money, and Multipliers. There are five different pre-built account types to match your risk tolerance.
Like Stash, Acorns has a three-tier price structure, from $1-$3/month, but it lacks the strong educational content you get with Stash.
The final word on Stash
All in all, Stash has an easy to use platform that makes investing interesting and approachable. All of those carefully curated ETFs show you that you can back your beliefs with cash. They have a decent amount of educational content too.
Add all of those things up and Stash is an intuitive investment app that’s good for beginners.
- With automated deposits, you can get into a habit of investing.
- The focus on small deposits shows you that you don’t need a ton of money to start investing.
- Stash’s millennial-friendly collection of ETFs can make investing exciting.
I’ve voiced my concerns about the costs associated with Stash, and they are worth considering. However, if Stash is what you need to finally start investing, I’d say it’s worth it overall.
Yes, you can make money with Stash. It’s like any other legitimate investing platform. If what you’ve invested your money in does well, then you can make money from it. And like any good brokerage, Stash acknowledges the risks associated with investing.
DiversyFund is much different from Stash – it’s crowdfunded real estate investing. However, DiversyFund is unique in that world because they own and manage property directly instead of acting as a broker, which is why they don’t charge account management fees.
Crowdfunded real estate is a very illiquid investment compared to investing with Stash, and DiversifyFund offers fewer options than some of its competitors.
Both Robinhood and Stash offer micro shares of stocks and ETFs, and both are commission-free trades. Where they differ is that Robinhood has $0 fees, unless you want Robinhood Gold for $5/month.
Robinhood Gold comes with investing on a margin, professional research, and level II market data. It’s like supercharging your investments.
Robinhood also trades cryptocurrency, but it’s a much more hands-off micro-investing platform. It’s better for people who feel comfortable on their own.