Stash Invest is an app that simplifies the world of investing. By providing different tips and tools, it teaches you how to invest. Rather than constructing an investment portfolio for you, this app gives you the foundation to build your own investment portfolio. You have the freedom to invest in things you care about.
Unlike other online investment services, this is not a robo-advisor. Robo-advisors are online companies that offer investing advice and choose investments for customers. They’re affordable alternatives to traditional advisory firms. Often robo-advisors create investment portfolios for you based on your income and risk tolerance. They automatically invest your funds in things that best fit your financial situation. This is a popular hands-off approach to investing.
However, Stash puts that investing power in your hands. It believes that since it’s your money, you should have control over what you invest in. You choose the different investments that make up your portfolio. This may seem daunting, especially for those who have never invested before, but the company gives you the necessary guidance to help you make the right decisions for you.
Beginner investors looking for a hands-on experience; Investors who care about what they invest in.
Stash helps you start investing on your own, but at a higher management fee than other services.
Pricing: How Much Does Stash Invest Cost?
|Option Name||Management Fee||Minimum Balance||Features|
|Stash Invest||0.25%||$5||Fee of $1 / month for accounts under $5,000, referral bonus, mobile app access, first month free|
For Stash Invest accounts with balances under $5,000, the fee is $1 per month. If your account balance is over $5,000, the fee becomes 0.25%. The first month is free, allowing you to try it out without any commitment.
There are zero add-on transfer or early withdrawal fees. There is also no penalty to close your account. But if your account has insufficient funds, the company is not responsible for the $30 overdraft fee. It emphasizes that customers must make sure that all accounts have enough funds before transferring money to the service.
With a minimum balance of only $5, you can start investing with very little. The company's primary investments are in exchange-traded funds (ETFs). These are tradeable, inexpensive funds and are a popular way to invest. The annual fee of its ETFs range from 0.07% to 0.95%, with the average being 0.39%. When compared to the ETF fees of some other robo-advisors, which run from 0.10% to 0.25%, Stash’s fees are on the higher end.
If you're interested in a retirement account, the minimum balance and monthly fee is a bit higher. For Stash Retire, the minimum balance is $15. The subscription fee is $2 a month for accounts up to $5,000. For accounts with a balance beyond $5,000 the fee is 0.25%
Stash’s Investing Strategy
When it comes to investing with Stash, you’re in control. The company's mantra is “invest in what you believe in.” With over 30 different ETFs to choose from, you have a range of options to find an investment fund that you care about.
You can start investing with as little as $5. The company primarily works through fractional shares, which allows for this low cost. This means buying a full share and splitting it up into smaller shares. If it splits up the ownership of a $100 share, you can own a portion of it for $5. Fractional shares allow you to invest in more and different funds, increasing your financial flexibility and portfolio diversification. It also smoothly transitions you into the investment world, rather than immediately jumping in and buying one high-priced share.
Stash Invest offers a retirement account option, Stash Retire, which follows the same investment model as Stash Invest. In Stash Retire, you’ll be able to invest money in a tax-advantaged account, meaning you won’t need to pay taxes when you take out the money. But, you have to wait until you’re 59 ½ to withdraw.
You’ll need to use both Stash Invest and Stash Retire if you want to invest with a brokerage and retirement account.
The company creates a complete hands-on investing experience for the user. It gives investing recommendations and tips – you do the rest.
It offers over 30 different ETFs, which is more than many robo-advisors offer. These ETFs are organized and renamed to better reflect their holdings. This renaming may help investors choose their investments and understand what they’re putting their money toward.
The company also has a Smart-Save feature, which lets user save more money automatically. Smart-Save analyzes users’ earning and spending habits to determine where they might have some money to spare, and then automatically puts that extra cash in their Stash account. This money can be left in the account to accrue interest or it can be invested.
In early 2018, the company will be adding Stash Banking. This feature will help users manage their money, and it will also offer FDIC-insured accounts with no minimum balance required.
Who Is Stash Invest For
If you want a hands-on experience with investing, then this is the option is for you. Often, robo-advisors pride themselves on a creating a hands-off experience for users: they do all the investing and trading for you. But with this one, those decisions are in your hands.
The company provides comprehensive help and guidance for first-time investors. If you want to start investing but don’t know where to start, it teaches you how to choose investments, manage your portfolio and when to trade. This involved experience gives you a practical education in investing.
Stash is also useful for long-term investors. It teaches you how to watch the market and be patient with your investments. This helps you get bigger returns in the long run.
With ETFs organized in a thematic fashion, the company encourages you to invest in what you care about. You’re able to control where your money goes.
If you have more $25,000 in investable assets though, you may want to consider getting a human advisor instead. You can use SmartAsset's financial advisor matching tool to get matched with an advisor in your area who suits your needs. To learn more about different individual advisors in your area, explore SmartAdvisor Match.
How Stash Invest Works
Stash claims that in order to get started, “all you need … is two minutes, $5 and a phone.” You can also create an account online, though the actual investing is only done on the app. If you want to give it a try before committing, the first month is free.
You start by creating your profile. You provide information like your age and investment goals. This helps the company determine factors, like risk level, which affects your suggested investments. Risk levels act as an accurate gauge of your financial standing. They’re there to help you choose investments that are appropriate for your situation. There are three different risk levels: conservative, moderate and aggressive. You cannot manually change your risk level – you’ll have to alter your personal details and investment plan to do so.
Once your account is created, you can choose your first investment. Because the company uses fractional shares, you can start investing with as little as $5. Investments are suggested based on your risk level. They’re divided into three categories: “I believe,” “I want” and “I like.” These categories are comprised of different, renamed ETFs to help you understand what’s in that investment.
The “I believe” category has investments that are driven by a specific cause, whereas the “I want” category has investments that align with your investing goals. The “I like” category has investments that are dedicated to things you enjoy.
For each investment, the company details its risk level, performance history and the holdings that make up that mix. You can only add the suggested ETFs into your portfolio. This helps create an investment portfolio that works with your situation. The company also indicates if the portfolio isn’t diversified enough, which helps minimize your risk and maximize your returns.
The last step is to fund your account and verify your identify. You can only use your checking account as the funding account. When money is transferred from your bank to Stash, there are no transfer fees. However, you’ll be subject to overdraft fees if the account does not have enough funds to cover the transfers. Once everything is verified, you’ll be able to start investing.
Overall, the company gives you hands-on control of investing. To help you make the best decisions, it has investing tips and guides on its app and website. With this guidance, it educates and prepares you for long-term investing.
What's the Catch
You have the freedom to invest in over 30 ETFs. But the power to choose comes at a higher fee. Some of these ETFs have high annual fees, going up to 0.95%. This is higher than the annual ETF fees of other robo-advisors, which usually goes up to only 0.25%.
In addition, Stash costs more to use than the average robo-advisor. Though $1 per month for accounts under $5,000 doesn’t sound like much, if you keep your balance low, it adds up. Other robo-advisors offer lower prices. For example, SigFig offers no management fees.
Its website also isn’t the most informative. Though it’s clean and has a neat interface, not a lot of information is provided upfront. It also provides an email address but no a contact phone number. Plus, when it comes to investing itself, there is no web access.
Competition: How Stash Invest Stacks Up
Stash offers a truly unique service by giving you the complete freedom to choose your own investments. Other robo-advisors typically just gather and use your basic information to create an investment portfolio. This one takes personalization to the next level by having you create and choose the investments yourself.
A similar app, Acorns, has the same rates as Stash. Like Stash, Acorns offers both a savings and investing option. Acorns tracks your purchases, rounds up the change and invests that spare change, while Stash analyzes your spending habits to find categories with extra cash. Acorn's approach to investing is hands-off, at the same cost of Stash’s investing service.
|Robo-Advisor||Management Fee||Minimum Balance||Best For|
|$1 for balances up to $5,000; 0.25% for balances above $5,000||$5|| |
|Flat monthly fee between $1 and $3||$0 to open, $5 to start investing|| |
If you want to be able to choose and manage your investments, Stash is the better option. It may cost a little more, but you’ll learn the ins-and-outs of investing and it’ll be a better fit for your hands-on investment approach.
Bottom Line: Should You Use Stash Invest?
Stash Invest gives you control over your investments. It allows you to create your own investment portfolio, putting your money toward your personal interests. For those who have never invested before, it provides the necessary knowledge to help you become a long-term investor. Though the monthly fee is higher and there isn’t much account diversification, if you want to start investing while learning about the field, then this may be the right choice for you.
Tips to Help You Save for Retirement
- If you’re investing primarily for retirement savings, you first should see how much you currently have. A retirement calculator will help you envision how your money will grow over time and how much more you need to save.
- Stash Invest will help you start saving, but you can get more comprehensive expert guidance by working with a financial planner. In addition to investing via ETFs, a planner can help you find savings and certificate of deposit (CD) accounts that also help you meet your financial goals. Even just talking once with a planner can help you understand how you can best allocate your savings. SmartAdvisor, a matching tool, will help you find financial advisors near you who cater to your particular needs.