The use of technology has dramatically reduced investment barriers. Nowadays, everyone has access to a wide range of choices that are both easy to understand and accessible.
Stash is one of these options. With Stash, users can invest in fractional shares of stock – even if they don’t have a lot of money. You can invest as little as $0.011 to $0.05 in stocks or ETFs with Stash.
Fractional shares aren’t the only thing available through Stash. This functionality is now available for free with other major brokers as well. Consider that when deciding where to invest.
In this Stash Review, we “ll tell you what Stash is, how it works, its fees, pros and cons, and much more.
What Is Stash?
Stash was founded in 2015 after the founders asked themselves: why don’t half of Americans invest? They kept coming back for one reason: it was intimidating and unrelatable.
Using Stash, you can automatically save money and invest it in small chunks. It also includes tons of educational resources and a managed portfolio feature called Smart Portfolio, which allows you to invest completely hands-free.
How does Stash work?
Stash is very easy to use. Here are the exact steps to get started-
# 1 – Download the app
Visit Stash’s website or download the app, available for Android and iOS. First, you’ll need to create an account by creating a password and sharing your email address.
# 2 – Fill Out Your Profile
Stash will then ask you to fill out a survey and answer some questions. These questions will help Stash guide your investment decisions. Being honest with these survey questions is important because they determine your risk tolerance. It shouldn’t take more than a few minutes to complete this task.
# 3 – Choose An Investment
According to your answers, Stash will recommend investments that match your risk tolerance (conservative, moderate, or aggressive). You can learn more about the investments by clicking on them (Don’t worry, they’re explained in layman’s terms!). (Don’t worry! It’s all example that makes investing relatable by letting you invest in “themes” based on what you want, believe, or like. We’ll explain more on that below.
The platform currently offers thousands of investment options (stocks and funds). As little as $0.011 can be invested in these.
4 – Link Your Bank Account
Invest money from the bank account you want to be withdrawn from.
Transferring money into Stash takes about 2-3 days.
# 5 – Confirm Your Identity
Create a four-digit PIN, verify your identity, and you’re done.
Stash features
Stash’s design is its strongest feature.
With an easy and intuitive design, Stash stands out from the competition.
Unlike other Robo-advisors, Stash considers your age, risk profile, and investment goals to recommend low-cost securities, mostly ETFs.
The offerings of Stash are categorized by sector, while those of ETFs are categorized by category.
On clicking one, you’ll be taken to a screen with information about the fund’s risk level, its constituent companies, its underlying security (usually an ETF), and its ticker symbol.
You’ll also find a link to the fund’s website and the fund’s most recent share price, dividend yield, and expense ratio. There is a wide range of Stash funds, ranging from very good and cheap to less so. Expense ratios can give you an idea of how much it costs to own a mutual fund or ETF.
Earn Stock-Back® from the stores you shop at most frequently.
It’s easy to open a Stash bank account since there is no minimum deposit or hidden fees.
In addition, Stash offers Stock-Back® rewards on purchases at merchants that offer stock, such as Walmart and Amazon. If you aren’t shopping at a publicly traded company, you’ll receive a percentage of your purchase in the form of an ETF5.
Stash’s Portfolio Builder
Using the Portfolio Builder, you can create your investment strategy. The app offers a variety of investment options, allowing you to find the right investment for you.
Stash’s Smart Portfolios
If you want to build an epic portfolio on your own, why not let Stash handle the heavy lifting with their Smart Portfolios? Their Smart Portfolios are designed based on your risk tolerance and extensive financial research. The result is diversity and personalized portfolios.
With Stash, not only will the portfolio build itself, but also you will be able to add and remove cash without any worries. Instead, Stash will automatically adjust your portfolio toward the ideal Smart Portfolio.
As a result of Stash’s Smart Portfolios, you have a well-diversified investment portfolio that enhances and solidifies your long-term investment journey.
Diversification Analysis
Stash offers a Diversification Analysis tool that you can use to maintain a balanced portfolio based on your risk tolerance if you want a more DIY approach. In addition, the tool can help you stay on top of your personalized investments.
How much does Stash cost?
Currently, Stash offers two flat-fee pricing options.
- Growth — $3/mo: Using this plan, you will be able to open a personal brokerage account, utilize Stash Banking2, access Smart Portfolios, as well as receive financial advice, and access up to $1000 in life insurance.
- Stash+ — $9/mo: In this option, you’ll earn 2x stock with the Stock-Back Card8 and get $10k in life insurance access. You’ll get up to two custodial investment accounts for your children (these are not 529 plans).
The subscription tiers for Stash are higher than those for Acorns, which start at $1/mo and $3/mo. However, Stash includes banking, while Acorns’s highest plan is less expensive at $5/mo.
Important Note: Starting August 1, 2022, Stash will no longer offer the Beginner ($1/mo) plan.
Who should use Stash?
Starting small and building your investments slowly can be a great relief if you’re new to investing.
Stash is a great stepping stone to building a solid portfolio for new investors without a lot of investment capital.
Who shouldn’t use Stash?
You may not want to try Stash if you’re an experienced investor. Stash walks you through building a portfolio, which is great if you understand how to do it.
Other brokerage firms may offer less expensive funds if you invest more than a few hundred dollars.
Pros & Cons
Pros
- Both DIY and automated investing.
- Fractional shares.
- Values-based investment offerings.
Cons
- Smart Portfolios don’t offer tax-loss harvesting.
- No automated IRA management.
Is It Safe And Secure?
Apex Clearing, a FINRA-registered broker, holds a Stash brokerage account. SIPC protects your investments for up to $500,000 total.
Currently, your Stash account is enrolled in what is called the Apex FDIC-insured Sweep Program. FDIC insures deposits made to the Sweep Program for up to $250,000 per customer at each FDIC-insured bank participating in the Sweep Program. Once your cash is deposited, it is no longer covered by SIPC.
Stash uses 256-bit encryption on its website for data security and supports two-factor authentication (2FA). At the time of writing, the company has not been involved in any hacks or data breaches.
Conclusion
Stash is a good option to help newer and younger investors manage money effectively, and the subscription model makes it more affordable as the account balance grows. The educational content on Stash is excellent and easy to understand, making this a great option for new investors who wish to learn about investing. In addition, Stash gives users more control over their financial lives in one place.
Stash has some key limitations, including its Robo-advisory part can only be deployed inside taxable investment accounts without tax optimization. Your tax-protected retirement accounts cannot be enrolled in Smart Portfolios if you are looking for a Robo-advisor for an IRA.
Stash FAQs
The following are some of the most common questions people ask about Stash:
Does Stash make you money?
Members who attend Stash Stock Parties can earn stock pieces when they use the Stock-Back® Card. With the Stock-Back® Card6, Stash banking customers can earn 0.125% stock on all purchases and up to 5% at certain retailers.
Can you try Stash at no cost?
When you deposit at least $5 into your Personal Portfolio, you’ll receive a $5 bonus into your Stash account after the first month of the Stash plan you choose
What bank does Stash use?
Your money is safely held at Green Dot Bank, an FDIC-insured bank.
Is Stash safe to give SSN?
With Stash, your data, including your social security number, is encrypted with 256-bit encryption. Communications are encrypted with Transport Layer Security (TLS), and you can add two-factor authentication and biometric recognition.
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