In some ways, Stash operates like other robo advisors we've reviewed here at Investor Junkie. But unlike Betterment or Wealthfront, Stash doesn't directly manage its customers' accounts. Instead, the service teaches you how to start investing by building a portfolio of ETFs or selecting single stocks.
Stash requires no minimum balance in your account, and there's also no minimum investment required to begin. So it's a great place to start if you want to learn how to invest but don't have a lot of cash to do so.
We took Stash for a test-drive, and this is what we found.
Stash Invest Features
|Fees||Beginner Plan: $1/month; Growth Plan: $3/month; Stash+ Plan: $9/month|
|Mobile Access||iPhone App, Android App, Blackberry App|
- ETFs and Stocks Used — Your investment options are usually exchange-traded funds (ETFs), but unlike other robo advisors, there are some individual stocks too. Stash can choose among thousands of investments and will offer what it thinks is most suitable for your risk level.
- SIPC Protection — Your funds with Stash are covered by the Securities Investor Protection Corporation (SIPC) through the clearing agency (see below).
- Third-Party Clearing Agency — Investments with Stash are held through the Apex Clearing Corporation. Apex is the firm that handles the custody of assets, reporting, trade confirmation, settlement, and securities delivery in Stash.
- Fractional Shares — Stash allows you to hold fractional shares, meaning you can hold less than one complete share in your portfolio. This comes in handy with expensive stocks, such as Amazon, which costs more than $100 per share.
- Education — Stash provides in-app and email education to help investors learn the basics.
- Security — Stash is a Registered Investment Advisor and is regulated by the Securities and Exchange Commission (SEC). The app uses 256-bit bank-grade encryption to secure your information. It also uses a secure sockets layer (SSL) to protect information sent between Stash and its servers. Also, Stash does not store your bank login information.
- Auto Stash — Set scheduled times to make deposits into your Stash Invest account.
- Stash Retire — Stash has moved into the retirement-savings space by now offering Roth IRA and traditional IRA accounts. You can open an account and invest in stocks for as little as $0.01.
- Smart-Save — Smart-Save is a feature that calculates when you've got spare cash, then saves a small percent of it. You can adjust your savings rate and withdraw at any time. All savings in your Stash account will earn interest.
- Custodial Accounts — You can open and maintain a Stash account on behalf of a loved under 18. This is a good opportunity to get a child or grandchild interested in investing and in letting compound interest work its magic.
- Stash Coach — Stash Coach is a program to help you whip your portfolio into shape. Complete investing challenges appropriate for your risk level and earn points and a ranking. Besides injecting some fun into the investing process, this will help Stash tailor an asset allocation right for you.
- Cannabis Investing — Stash will now let you add… well… a stash to your Stash. That's because the service has rolled out investment options that take advantage of the rapidly growing cannabis industry.
- Stash Debit — Stash now offers a bank account with a debit card issued by Green Dot Bank. There are no fees for this account — including overdraft fees. Plus, with a Stash Debit account, you can earn fractional shares of a retail company when you use your card to purchase from that retailer.
- Stash DRIP — DRIP stands for “dividend reinvestment plan,” It allows investors to do just what it sounds like. Automatically reinvesting your dividends can help you maximize the compounding power of long-term investments while saving you money on commissions and fees.
- Partitions — Stash's budgeting tool helps investors organize their savings to meet different expenses and goals. This is reminiscent of the envelope budgeting method. You can move money in and out of partitions as needed.
What Is Stash Invest?
Stash Invest was created to help you get started with investing.
According to Stash CEO Brandon Krieg:
“We think the big challenge is getting people to start investing. Some people have no interest or time to learn to invest; robo advisors are great for them. But many others truly want to become investors — to learn the ropes, choose investments, and know where their money is going. Unfortunately, most of them think investing is out of reach, because it’s too expensive, between minimums and share prices, and too complicated.
“We’re tackling the expense and confusion by letting people… choose from 40-plus investment themes (enough for choice without being overwhelming). Our investors want guidance, so we also give them notifications; for example, on a day when the market tanks, we might tell them to take a deep breath and resist the temptation to sell in a panic.”
After completing a questionnaire that determines your risk level, Stash presents you with a list of investment options from which to choose. The choice provided actually gives you more flexibility and control than typical robo advisors offer.
You can invest in what is most important to you, but Stash also provides you with personalized guidance and recommendations to help you along the way.
How Does Stash Invest Work?
To open up an account with Stash, you need to provide your Social Security number and information to link your bank account. You must be at least 18 years old to open an account. The service is available only in the U.S., although there are plans to take it international.
You will then complete a questionnaire that helps determine your investment risk level. Once established, your risk level cannot be changed; however, you can go into the app and revise your suitability questions, which may or may not change your risk level.
Your risk level, either conservative, moderate, or aggressive, is determined based on your age, investment time horizon, and investment goals. Each risk level has its own recommended investments. This is exactly what other robo advisors do, except Stash offers a lot more investment options than the competition. You'll be given a choice of investment themes consistent with your risk level.
Once you've provided the required information, which should take no more than a few minutes, you can start investing.
You can link your bank account directly with your bank login and password or connect with your account and routing numbers. As is the case with other investment platforms, if you choose to link with your account and routing numbers, your linked bank account will need to be verified using a micro deposit. Stash will make a very small deposit into your bank account, which you will need to verify. This process could take up to six business days.
Once your account is established, you'll be able to add or subtract money to and from your linked bank account using the Stash Deposit screen. Deposits and withdrawals are limited to $10,000 per day. You can link only one bank account to your Stash account.
Single Stock Investing
Stash will now let you invest in select single stocks, rather than just ETFs. To read about a company's fundamentals and select an individual stock, select the “Companies” tab in the app.
Currently, there are over 1,800 stocks and ETFs that select individually or invest in fractionally.
Stash Smart Portfolio
In addition to their regular investing options, you can also opt for Stash's Smart Portfolio. This a fully managed account and is essentially a way to easily automate your investing. Using your information and risk levels, they will build a customized portfolio for you based on extensive financial research. If your portfolio drifts 5% from its target allocation, they will rebalance it for you on a quarterly basis.
All you need to do to get started is add money to your portfolio and Stash takes care of the rest. They will also adjust if you take cash out, to make sure that you are always close to your ideal mix of assets. This portfolio option is only available to Stash Growth and Plus customers.
Stash recently rolled out a banking account with a debit card issued by Green Dot Bank. There's no minimum balance required to open and maintain a Stash Debit account. And there are also no fees. In fact, there are no overdraft fees with this account.
You can use your debit card to withdraw cash fee-free from Green Dot Bank-associated ATMs. Plus, you can deposit the bank account you've linked to your Stash account, direct deposit, or from a participating CVS, Rite Aid, or Walgreens store.
Here are some of the features of a Stash Debit account:
- Stash Stock-Back: When you use your Stash Debit card at a retailer on Stash's investing platform (such as Walmart, Starbucks, and Amazon), you'll earn a percentage of your purchase back as a fractional share of that company. If you use your Stash Debit card anywhere else, you'll earn a percentage back in a Stash ETF.
- Recurring Transfers: This lets you automatically transfer money from your external linked bank account to your Stash Debit account.
- ASAP Direct Deposit: When you set up your paychecks to directly deposit into your Stash Debit account, they'll hit your account as many as two days earlier than they'd hit another bank account. (Many large banks hold deposits for a few days to earn interest.)
Stash offers three subscription plans. Here's a rundown of the pricing and features for each plan.
|Features|| || || |
Stash Invest Screenshots
Stash Invest Alternatives
Stash Invest Pros & Cons
More Investment Options—Most robo advisors and micro-investing services construct investment portfolios using a group of between six and 12 ETFs. Stash gives you the option to invest in many investment themes but selects them from among thousands of ETFs and also includes individual stock recommendations.
Education—Stash makes sure that you learn to invest with confidence by providing information on all the basics.
No Minimum Deposit—You can open an account and start investing with only a few dollars; there's no minimum required.
Stash Debit Account—A Stash Debit account will let you earn fractional shares in retailers and ETFs when you use your issued card.
Delayed Trading Execution—As a long-term investor, this won’t be a problem, but it could be an issue if you plan to actively trade your account. It's possible that an order placed today won't be executed until the next day.
Costly for Small Accounts—While Stash charges $1/month for accounts under $5,000, that is higher than the 0.25% annual fee Betterment charges. Effectively, Betterment is cheaper for deposits under $4,800.
Final Thoughts on Stash
Stash Invest could be the perfect investment app for a beginning investor. Its lack of minimum deposits removes the single biggest obstacle to investing, which is the initial capital base. You can open an account with just a few dollars, then dollar cost average your way to a much larger portfolio.
The fact you can diversify your holdings with such a small amount of money is an incredible advantage to the very small investor. And Stash provides professional investment advice, including specific investment recommendations. This enables you to be involved in the investment process in a hands-on way; you can learn as you go, always assisted by the advisory service.
Stash could be the perfect investment app if it offered more competitive fees with smaller deposits. The service is very cost-effective on larger accounts.