Last Updated on May 4, 2022
Is Stash App a scam? Times have changed, and we can now finally say with confidence that investing is not only for the elite anymore. As times have progressed, micro-investing has now entered the scene. Even the simple commoner regardless of age can now start investing with ease.
There are a lot of mobile applications that have been developed with the goal to make investing accessible for everyone. One of these micro-investing applications is Stash.
In this Stash App review, we are going to scratch the surface of Stash and dissect its features one by one for us to know if Stash would make your ventures easier and if it is worth investing your money in!
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Stash is a micro-investing platform available in an application you can download either on the Play Store or the App Store. This app enables you to invest in more than 200 exchange traded funds (ETFs), stocks, and shares in one simple mobile interface.
You have to understand that Stash is completely different from robo-advisors like Betterment. Robo-advisors are different in a sense in which it does all the investing for you. This seems like a dream for some, but the downside with robo-advisors is that you can’t choose which stocks you want to invest in. It’s all about faith.
While with micro-investing platforms like Stash, you’re the one behind the wheel. You have the freedom to choose what you want to invest in and where you want your money to go.
Stash Investments LLC founders David Ronick and Brandon Krieg started and launched Stash back in October 2015, particularly in the suburbs of New York City. They came up with the idea of Stash with the main purpose of simplifying the idea of investing and making it available for all Americans to use.
As of the time of this post, at least 2 million people from the US have already opened an account and started investing with Stash. With such dedication and passion in reaching out to more investors, Stash has gained itself lots of awards like the W3 Awards, Webby Awards, Bezinga Awards, and many more!
With such a remarkable reputation it has build over the past few years, this begs the question, is Stash app a scam? We’ll go over that later on, but for now, let me tell you how Stash really works on the inside.
Getting Started with Stash
Your journey with Stash starts by downloading the app on your mobile device. You may not be able to do that, though, if you do not reside within the United States. The app is free to install, but of course, using the app itself will cost you some money.
Stash lets you avail of a 3 month free trial period, letting you have a feel of the app itself and figure out for yourself if it fits and is suitable for your investing needs.
Fees on Top of Fees
Once your free trial period is up, getting started with Stash will only cost you $5.
For the recurring fees, Stash will charge you $1 a month if you have a balance under $5,000 while those with balances above $5,000 are charged with a monthly fee of 0.25%. That’s a pretty neat deal for a micro-investing platform.
On top of all these recurring fees, you will also be charged with an investment expense ratio. This is basically just a service fee you pay for the overall administration of your account. These can range from 0.1% to 0.7% of your account balance annually.
Additional Requirements
Take note of this as well, Stash is a financial institution, implying they would require you to provide a social security number in order to confirm your identity.
Wrapping things up before getting on to the platform itself, you would have to choose a “funding account” first. What is this, you ask? Basically, a funding account is your own bank account which Stash will use to withdraw funds from to your investment account.
How Does Stash Work?
Investing With Stash
Once signed up to the platform, Stash will be asking you about your risk tolerance and you’ll be asked to choose if you want to invest with low, medium, or high risk.
Naturally, determining your risk tolerance also determines your returns. A low-risk investment will most likely bring you low returns. If you are planning to invest for the long term, it is best to settle for a low-risk ETF as experts say.
Once you have indicated your risk tolerance, you’ll also be asked your age at the time, your income, and for how long you want to keep on investing.
The upper hand with micro-investing platforms like Stash is its feature to enable users to choose stocks and ETFs (exchange-traded fund) for themselves rather than having a robo-advisor do all of that for them.
In the case of Stash, you can choose from more than 200 ETFs and stocks. You can buy shares from globally-renowned companies like Netflix, eBay, Amazon, and companies within the health and fitness niche.
Stash also gives investment options to parents who want to start investing for the needs of their family and children whether it be health or education.
Additional Investment Features of Stash
There are lots of things you can do with Stash besides choosing and investing in stocks and ETFs.
- First, Stash lets you sign up to your own debit card. This Stash debit card is where you can save and store stock rewards.
Stash also offers three tools which would be of utmost help in your pursuit to save up money.
- Set Schedule basically deposits money to your Stash debit card depending on the schedule you have set it to do so.
- Round-Ups, on the other hand, also deposit money to your Stash debit card. The difference here is it rounds up each transaction you make and deposits the difference to your debit card.
- Smart-Stash deposits money to the same Stash debit account, as well. This one analyzes your spending habits, and monthly bills then deposits a certain amount of money based on this analysis.
Other interesting features of Stash include:
- You can also open up Individual Retirement Accounts (IRAs) whether it be Roth or traditional IRAs.
- According to statistics, 84% of Stash users are first-time investors. Taking this fact into consideration, Stash provides coaching for these new investors in which you’ll be knowing more about personalized savings and advice regarding investments in general.
- Stash holds a stock-rewards program (you could think of it as a cash-back program) in which you will be gaining 0.125% in rewards when you purchase ETFs from Stash.
- This doesn’t have anything to do with investing but I figure it’s still worth mentioning. Stash also runs a referral program. Here, you can receive a commission of $30 for each person you invite to Stash given of course, that this person signs up and starts investing with the platform.
Here’s a tutorial on how to use Stash to give you an inside peak into the platform itself.
Is Stash app a scam? I have listed below the clues I found that may piece out the answer to this mind-boggling question.
Why Stash is Not Worth It
Lots of Fees
Stash’s target market is particularly the young and new investors. The fees aren’t exactly too expensive, however, there is a list of fees users have to take into account which could overwhelm them. Also, if you’d see other micro-investing platforms and look into their fees, Stash’s fees are more expensive.
Might be Too Simple
You got to appreciate the simplicity incorporated in this app. Unfortunately, for more serious and experienced investors, the features and interface of the Stash app might not suit their needs.
Limited Availability
Stash only opens its doors for Americans to use. If you reside outside the United States, there’s no way you could gain access to this micro-investing platform at all.
What I Like About Stash
Investments are Insured
You don’t have to worry about your money going into the wrong hands. Stash insures your money under Securities Investor Protection Corporation. If in any case the company behind Stash, Apex Clearing, get into trouble and go out of business, SIPC will protect up to $500,000 of all your investments and keep it safe.
Freedom to Choose
All your investments will not be done by someone else, instead, you will do the all the work yourself. If you’re the lazy type, you’re better off with robo-advisors. On the other hand, if you want to get serious with your investments and want to get used to this field itself, you’re fit for a micro-investing platform like Stash.
Perfect for First-Time Investors
The app is very simple to use since its target market leans more towards those who are newbies when it comes to investing. Plus, if you have no idea about investing in general, Stash will gladly provide you with your own personal training to teach you more about investments.
Free Trial
A free trial for a period of 3 months? Well, don’t mind me if I do! This trial is great for those who just want to have an idea of what it’s really like investing first-hand and figure out for themselves if this app is suitable for their needs without having to take out money from your wallets!
Paid Fees are Waived
Stash Investments LLC has waived paid fees of users at the age of 25 and below. Even if this is the case, you don’t have to worry about gaining limited access to all the features Stash offers to its users.
Closing Thoughts! Is Stash App a Scam?
Stash is definitely not a scam. This is a legitimate micro-investing platform you can trust your money with if you want to start with your investments!
I’d totally recommend this app for those who want to start investing but may be overwhelmed by the complexity of investments in general. With Stash, it won’t be that hard anymore!
It’s very simple to use, and is very friendly to the young and new investors of a new generation. Plus, doing all the investments yourself rather than having someone else or something else in that matter, will let you explore your full potential when it comes to this niche.
Unfortunately, despite all the useful features of Stash, this one might not really suit your needs if you want to do more with your investments. It still has its own limitations. It’s also a downside that Stash only caters to US residents.
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