If you're looking for the best investment app for you, it can be easy to get overwhelmed by the amount of options out there — especially if you’re just learning how to invest money. Whether you’re a novice or a pro, we’re here to help you find the right investment platform for you.
Stash and Robinhood are two especially popular trading platforms because both aim to make investing affordable. There are important differences between Stash vs. Robinhood, and this guide will help you decide which is best for you based on your situation.
Stash vs. Robinhood
How does Stash work?
Stash is an online broker that aims to simplify investing. With Stash, you can pick from among thousands of different individual stocks and ETFs (exchange-traded funds)5 to invest in. And because Stash has no minimum balance requirements and offers the chance to purchase fractional shares, it's very affordable to get started. In fact, you can invest with as little as $11 and buy a portion of a share of almost any investment Stash offers.
Stash does limit you to investing in stocks, bonds, or ETFs,5 though. And you have the option to pick your own investments. Don’t be intimidated, though. Stash offers a wealth of educational material on its website, and you have the option to get advice from a real person if you need it.
Investors who choose either the Growth or Stash+ tiers will also have the option to invest in Stash's Smart Portfolios. These carefully designed portfolios enable you to be diversified and regularly invest in your portfolio without having to make all your own investment decisions. Stash will also rebalance your portfolio for you, as well as reinvest your dividends.
Stash also offers opportunities for automated investing. You can make automated transfers from your bank on a set schedule;6 round up transactions on your debit card to the nearest dollar so you can invest your change; or transfer money when an algorithm determines you can afford to do so based on your spending patterns.
The biggest downside of Stash is that there's a cost to using it. You have a choice of a Beginner account for $1 a month;1 a Growth account for $3 monthly;1 or a Stash+ account for $9.1 The beginner account provides access to a taxable investment account. If you want the chance to invest in a tax-advantaged retirement account, such as a traditional or Roth IRA,2 you have to commit to a larger monthly fee.
However, if you also do your banking with Stash, you get access to a cool feature called Stock-Back® rewards.4 With this feature, you earn portions of stock shares when you use your Stash debit card with more than 11 million qualifying companies, including Amazon and Starbucks. And if you shop at a company that doesn't participate, you'll get Stock-Back® rewards in an ETF.4
… or read our detailed Stash review.
How does Robinhood work?
Robinhood, like Stash, is a brokerage that allows you to make your own investment choices — unlike a robo-advisor that invests for you. With Robinhood, you have the option to buy stocks, ETFs, options, and cryptocurrencies. It offers a different array of investments than Stash.
Robinhood also has no minimum account balance requirement and offers the chance to invest in fractional shares. With fractional shares, you can buy small pieces of companies or ETFs, and you don’t need to spend a fortune to buy full shares of stock.
Perhaps the biggest perk Robinhood offers is its lack of fees. There are no trading or management fees, unless you sign up for Robinhood Gold. Gold gives you access to professional research reports, enables you to trade on margin, and allows you to make larger instant deposits than the standard account. You get all these features for $5 per month.
Whether you opt for Gold, you can buy and sell assets commission-free, no matter how often you trade.
… or read our detailed Robinhood review.
4 important differences between Stash and Robinhood
Although Stash and Robinhood have some similarities — including no minimum balance requirements, access to a mobile app, and the chance to trade fractional shares — there are important differences between the two. Here are four key differences:
- Features: Stash offers Stock-Back®;4 Robinhood does not. Stash also provides unique options for automated investing, such as roundups that allow you to invest your spare change. However, with Robinhood Gold, you can invest on margin, whereas Stash doesn't offer margin accounts.
- Fees and pricing: Stash charges a monthly fee of at least $1.1 Robinhood provides fee-free accounts and can be a more affordable option if you're prioritizing low-cost investing.
- Support: Stash makes it easy to talk to financial professionals about investing, whereas Robinhood doesn't offer this kind of guidance. Both Robinhood and Stash provide educational materials online as well.
- Investment options: Stash allows you to invest in stocks, bonds, or ETFs;5 Robinhood offers stocks, ETFs, options, and cryptocurrencies.
Stash vs. Robinhood: which investment app should you choose?
Stash is likely a better choice if you're interested in earning Stock-Back® rewards4, as Robinhood doesn't offer anything similar to this feature. If you want to invest in bonds, Stash is also the better option, as these aren't available with Robinhood. And if you want personalized advice from investment professionals, Stash offers it, but Robinhood does not.
If, on the other hand, you're looking for a brokerage account with no monthly fees, Robinhood is a better bet. You don't have to sign up for Robinhood Gold, so you can invest your money fee-free with Robinhood. If you want to invest in cryptocurrencies or purchase options, Robinhood is also a better choice, as Stash doesn't offer these options. And if you're hoping to trade on margin, you can do so with Robinhood, but not Stash.
FAQ about Robinhood vs. Stash
Is Stash a legit investment app?
Stash is a legitimate investment app. It was founded in 2015 by co-founders with a long history in the fintech industry, and there are now more than 4 million Stash users. Stash accounts are held by Apex Clearing, a broker-dealer registered with the Financial Industry Regulatory Authority. Stash is also a member of the Securities Investor Protection Corporation (SIPC), so stocks in your Stash account receive up to $500,000 in protection if the brokerage runs into financial trouble.7
Is Robinhood a legit investment app?
Robinhood is a legitimate investment app. It was founded in 2013, and it had more than 10 million users as of the end of 2019. It's also registered as a broker-dealer with the U.S. Securities and Exchange Commission and a member of the Securities Investor Protection Corporation (SIPC). You receive up to $500,000 in protection for stocks and options in your account in case Robinhood experiences financial difficulties.
Can you actually make money on Stash?
Stash allows you to invest in stocks, bonds, and ETF funds.5 If your investments perform well, you could make money. If your investments do not perform well, you could lose money. There is always a risk of loss when investing, but a diversified portfolio of sound investments may earn a reasonable return over time. To ensure you have a well diversified portfolio, you might consider making a habit of examining your asset allocation.
Is Robinhood good for beginners?
Robinhood is good for beginner investors because it requires no minimum deposits, charges no fees, and offers free stock trading. You can also buy and sell fractional shares, which is less expensive than buying a full share of stock. However, unlike with a robo advisor, you have to pick your own investments. Robinhood provides online learning tools, but you'll need to get informed to make your own investment choices.
Is Robinhood better than Stash?
Robinhood offers some features Stash doesn't, including the opportunity to get an account with no fees, the chance to trade cryptocurrencies and options, and the ability to do margin trading with Robinhood Gold.
However, Stash offers features Robinhood doesn't. You can earn Stock-Back® if you have a Stash debit card,4 access several solutions for automated investing, and get advice from financial professionals. Consider your personal finance needs from an investing app or trading app to have the best results in choosing one that’s right for you.
Bottom line on Stash vs. Robinhood
As a new investor, it's important to find an affordable broker or online brokerage that offers a mix of good investment options. And although it can be intimidating to get into the stock market and learn how to invest money, both Stash and Robinhood are good options if you want to pick your own investments and purchase fractional shares.
But if you'd prefer a little more hands-on help, Betterment and Wealthfront could be better investing apps for you. Or if you're particularly interested in opening a custodial account, then you might want to check out Acorns. These are all among the services that made our list of the best investment apps.