Saving money is really important, as you'll need cash in the bank to help you accomplish important goals. But you don't just want to put the money you save in any old bank account — you should invest at least some of your funds in assets that may provide a solid return on investment. This is especially true if you have goals such as early retirement that will require you to amass a large nest egg ASAP.
Investing money may seem complicated, but fortunately, there are apps and tools out there that make growing wealth easier. One of those apps is Stash. Stash allows you to invest money into the stock market with an investment as low as $1, and it also helps you learn about investing so you can make more informed choices.
While Stash does charge some fees4, its easy-to-use investment tools and educational materials make building a portfolio that will hopefully earn money effortlessly over time simple for even the most novice of investors. Unlike many side hustles, this one is fairly hands-off — instead of you working for your money, Stash teaches you how to make your money work for you by purchasing assets that may earn a good return.
If you're not sure whether Stash is right for you, this Stash review can help you decide.
What is Stash?
Stash was first launched in 2015 with the goal of democratizing financial opportunity so every American has the tools and guidance necessary to grow their wealth through investing. It was founded by Brandon Krieg and Ed Robinson, who are still involved with the company today as CEO and President, respectively.
Kreig and Robinson both came to Stash with extensive experience. Kreig spent more than 20 years in the fintech industry and co-founded EdgeTrade, an electronic trade execution company. Robinson, on the other hand, came from Macquarie Securities Group, which is a large investment bank.
Stash grew rapidly, hitting a million users by August 2017. Other products also launched along the way, including retirement accounts1 in June 2017 and custodial accounts2 in January 2018. There are now more than four million account users, and those who take advantage of Stash's automated investing service save an average of $1,4329 annually.
How does Stash Work?
Stash offers users a wide variety of different ways to make money, including investing your cash in the market or using a debit3 card that offers rewards in the form of stocks or funds. Various programs have different features and fees, so it's important to understand all the ways you could grow your wealth by using Stash products.
Stash debit card
The Stash debit card is available to you if you open a banking account with Stash.3 This account charges no monthly maintenance fees; has no minimum balance requirements; and charges no fees for direct deposits, ACH transfers from other banks, or obtaining your debit card. You can also make withdrawals from more than 19,000 ATMs without paying any fees — although you do have to pay $2.50 if you use your card at a non-participating ATM or if you withdraw funds from a teller.
Your Stash debit card helps you make money because you earn Stock-BackⓇ rewards at more than 11 million places.3 When you spend on gas, groceries, dining, or purchases of any type at participating merchants, you qualify for at least 0.125% Stock-BackⓇ. You can also qualify for Stock-BackⓇ bonuses that provide as much as 5% back at some stores.
These Stock-BackⓇ rewards actually give you shares of stocks at the companies you shop at. For example, if you shop at any store listed on Stash's platform — including popular places such as Walmart, Starbucks, and Amazon — your rewards are used to buy stock in that company. And for purchases made at other stores not on Stash's platform, such as local shops, you get your Stock-BackⓇ invested in a diversified investment fund.
You do have to participate in a Stash subscription plan to get Stock-BackⓇ when you use your debit card. There are three different Stash subscription plans that start at $1 per month (we'll talk more about those below). If you're going to invest in a Stash plan anyway, adding the Stash debit card can help you to grow your investment account balances quickly and effortlessly.
Stash offers a simple investing app that allows you to start with just a $1 investment and build a portfolio of stocks, bonds, and exchange-traded funds (ETFs). You can choose from three different Stash investment account options:
- Stash Beginner: This plan costs $1 per month4 and includes a personal investment account. It also comes with financial education and a debit account, which enables you to earn Stock-BackⓇ.
- Growth: This $3-per-month4 intermediate account comes with a personal investment account as well as a retirement investment account. You'll have your choice of a traditional or Roth IRA (Individual Retirement Account)1 , and Stash will help you pick the best account type for your situation. You can also earn Stock-BackⓇ from the debit account and get financial education, just as you do with Stash's cheaper option.
- Stash+: This account offers you a personal investment account, plus a retirement investment account and a custodial investment account for up to two children.2 It costs $9 per month4 and comes with financial education as well as monthly market insight reports. You can earn Stock-BackⓇ with this plan as well — you actually get double Stock-BackⓇ compared with the Beginner account — and you get a metal debit card rather than a typical plastic card.
Each of these plans enables the purchase of fractional stock shares and gives you a choice of how to fund your investment accounts:
- Investing on a set schedule: You can set recurring transfers5 from your bank account so you save automatically.
- Round-ups: Purchases you make with your debit card are rounded up to the nearest dollar, and the "spare change" from every purchase is invested for you.
- Smart Stash: Stash tracks your spending patterns and earning patterns; it then transfers funds to your investment account when its algorithm determines you can afford to do so.
When your money is transferred into your Stash investment account, you can build your own portfolio and invest in any stocks, bonds, or ETFs6 you want within Stash's vast list of companies and funds. Stash makes choosing investments easy by asking you a few questions when you set up your account, after which you receive personalized recommendations that fit your financial goals. You have the freedom to accept as much of that guidance as you want, so you can take every recommendation or none, depending on what you prefer.
Who can start an account with Stash?
Here are some of the prerequisites:
- You have a bank account with a U.S. bank.
- You have a Social Security number.
- You’re a U.S. citizen, have a Green Card, or have certain types of approved visas.
All you need to do is download the app, create an account, and choose the Stash plan that's right for you. You'll also need to answer a few simple questions about your investor portfolio — and you'll need to be willing to pay Stash's fees, which start at $1 per month for the basic plan.
However, Stash isn’t necessarily right for every investor. If you want both a personal investment account and a retirement account, you have to commit to paying at least $3 per month. There are other discount online brokers that don't charge you any monthly fees for an account — although you can't typically buy fractional shares with them and you won't get the guidance that Stash provides.
Stash also requires you to be willing to pick your own investments — although this can be as simple as clicking a few buttons to accept its recommendations. If you'd prefer a more hands-off approach, a robo-advisor might be a better fit. Robo-advisors do charge fees, but these are typically a percentage of what you invest. They don’t, however, offer some of the cool features that Stash does, such as Stock-BackⓇ or round-ups.
How much can you earn with Stash?
The amount you earn with Stash is going to depend completely on you. The more you invest and the better your investments do, the more you can earn. As a reminder, investing involves risk.
Stash indicates that its users save an average of $1,4329 per year by using the company's tools. If you invested that money every in a tax-deferred account and your investments earned a 7% annual return over 30 years, you could end up with over $135,000 saved. Of course, you could also end up with similar savings from any online brokerage firm or robo-advisor, assuming you made the same investment and earned a similar return.
Maximizing your earnings with Stash
Maximizing your earnings with Stash is easy. You can earn more if:
- You use your debit card more to get more Stock-BackⓇ — especially if you frequently shop at merchants offering a bonus 5% back.
- You make smart investments. The performance of stocks and mutual funds is never guaranteed, and there's always a risk of loss. But if you invest in companies or ETFs6 that perform well, you can maximize your gains.
- You invest more money — and leave it invested. The more you put into the market, the more you have the potential to earn (or lose). If you set up frequent automated transfers to Stash, build a large portfolio, and leave your investments to grow, you may be able to build a huge nest egg over time if your investments perform well.
Using tools such as Stash Learn to help you become smarter about picking investments and building a diversified portfolio can also allow you to maximize your earnings while minimizing risk.
How to stay safe
Stash aims to make investing easy for beginners, but there’s always a risk whenever you invest — whether you pick stocks, bonds, or ETFs. While you can't always prevent investment losses, you can reduce your risk by building a diversified portfolio and ensuring you never invest in anything you don’t understand.
Common questions about Stash
Is investing with Stash a good idea?
Investing with Stash isn't the cheapest way to invest if you have a large investment account balance and are an experienced investor. After all, you’ll pay monthly fees for your account when many discount online brokers don't charge. But if you are a beginning investor; want more guidance and financial education; or like features such as Stash's Stock-BackⓇ program, investing with Stash can be a good idea.
How do I start investing with Stash?
It's very easy to start investing with Stash. Simply click here to get started. You'll then need to complete the initial questions that Stash asks you. We'll explain more below about what these questions entail.
How to sign up for Stash
To sign up for Stash, you need to meet basic requirements, including having a Social Security number and a bank account with a U.S. bank.
You'll then need to complete some basic questions, including:
- Your legal name and date of birth to verify your identity
- Your financial profile
- Your Social Security number
- Questions about your investment goals and style
The process takes around three minutes to complete and can be done entirely online.
Other investment apps to consider
Stash is just one of many apps that allows you to make money through investing. Two similar options you could try include Wealthsimple and Fundrise.
Wealthsimple works differently than Stash in that you don't make money with Stock-BackⓇ rewards for purchases. Instead, all your gains come from your investments. There's no minimum deposit required to get started, and Wealthsimple is a robo-advisor. That means it manages your investments for you, whereas with Stash, you build your portfolio based on Stash’s recommendations. The big benefits of Wealthsimple are tax-loss harvesting — which helps you reduce the tax consequences of investing — and the ability to talk with financial experts about your investment strategy.
With Fundrise, you also make money through investments — but this time through real estate instead of the stock market. Fundrise has a much higher minimum investment of $500, compared to Stash's $1 requirement. But it offers some great perks, including a 90-day guarantee that ensures the company will buy back your initial investment at the original price upon your request. The big benefit of Fundrise is that it provides portfolio diversification if you want to get some of your cash into real estate.
1 Stash does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction, or if a reduced contribution limit applies to a customer. These are based on a customer’s individual circumstances. You should consult with a tax advisor.
2 The adult (or Custodian) who opens the account can manage the money and investments until the minor reaches the “age of majority.” That age is usually 18 or 21, depending on the Custodian’s state. The money in a custodial account is the property of the minor. Money in a custodial account can be used by the parent or legal guardian, but only to do things that benefit the child.
3 Debit Account Services provided by and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value. In order for a user to be eligible for a Stash debit account, they must also have opened a taxable brokerage account on Stash. Account opening of the debit account is subject to Green Dot Bank approval. Stash Stock-Back rewards is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A., or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.
4 You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
5 The recurring transfers feature is offered by Stash Investments LLC and is not sponsored or endorsed by Green Dot Bank.
6 Before investing in any exchange-traded fund, consider your investment objectives, risks, charges, and expenses.
7Other fees apply to the debit account. Please see Deposit Account Agreement for details. You may select to pay your Stash subscription fee with your Stash debit/banking account.
8To note, SIPC coverage does not insure against the potential loss of market value.
9Source: Auto-Stash Can Help You Double Your Savings
FinanceBuzz is a paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser.