- 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 between thousands of investments and will offer what Stash 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 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; they can split a single share of a stock or ETF between several investors on the platform.
- 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 secure sockets layer (SSL) to protect information sent between Stash and its servers. In addition, Stash does not store your bank login information.
- Auto Stash — Set scheduled times to make deposits into your Stash Invest account.
- Stash Retire (New) — Stash has moved into the retirement-savings space by now offering Roth IRA accounts with a minimum of $15.
- Smart-Save (New) — 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 (New) — You can now 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 to let compound interest work its magic.
- Stash Coach (New) — 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.
- Marijuana Investing (New) — Stash will now let you add… well, a stash to your Stash. That’s because the service has rolled out investing options that take advantage of the rapidly growing cannabis industry.
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 invest as little as $5. They 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 personalized guidance and recommendations to help you along the way.
How Does Stash Invest Work?In order 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 in order to open an account. The service is available only in the U.S., though 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, your investment time horizon, and your 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 will be given a choice of investment themes consistent with your risk level. Once you have 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 (New)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 70 stocks and investments that Stash will allow you to select individually.
Stash PricingStash recently updated its pricing model. There are now three subscription plans, all with a flat fee starting at $1 per month. Here’s a rundown of the pricing and features for each plan.
Pros and 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.
- Low Minimum Deposit — You can open an account for less than what it will cost you for a Happy Meal at McDonald’s.
- 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, that can work out to be higher than the 0.25% annual fee Betterment charges. Effectively, Betterment is cheaper for deposits under $4,800.