Stash 2024 Review: Hands-On Investing for Beginners

Stash is an all-in-one personal finance app aimed at making investing easy for beginners. Through a combination of robo-advising and do-it-yourself investing, Stash lets you buy single and fractional stocks and ETFs for as little as $5. The service isn't free (you'll pay $3 or $9 monthly), but depending on the size of your portfolio, it could be cheap compared to the fees on other robo-advising services. Whether you're just starting out or have experience but want some automation, read on to learn what Stash has to offer.

This stock broker is a good fit for: Entry-level investors who want a service to guide them through the process and don't mind paying a monthly fee to get extra help.

Top perks

Stash is one of our favorite investing apps. It ranks among the best we've seen in these categories:

Keep reading for the perks that make Stash one of our top picks.

Fractional shares

Instead of waiting until you've saved enough to purchase whole shares, Stash lets you buy fractional shares at a lower cost. Fractional shares are an increasingly popular robo-advisor investment option.

Low barrier to entry

Stash accounts start at just $3 a month, and you can start with no account minimums (Smart Portfolio lets you invest for as little as $5). Stash's mission is to simplify investing for its customers and low costs are just one of the ways it does that.

Retirement accounts

Both Stash accounts have access to Roth and Traditional IRAs.

Stash debit card

The Stock-Back® Card gives you fee-free access to Stash's network of ATMs. It also lets you earn stock on debit card purchases with well-known brands.

Earning stock works like this: You'll either earn stock in the company where you're making the purchase or get rewarded in a default investment of your choice. For instance, if you buy a coffee at Starbucks, you can earn stock at Starbucks. But if you buy clothes from, say, a local consignment shop (i.e., a company that's not publicly traded), your earnings will buy shares in a default investment, like an ETF. Stock+ members will earn 1% back on up to $1,000 in monthly purchases (0.125% after), while Stock Growth members earn 0.125% back.

Some companies will qualify as "bonus merchants" and will earn you more stock, either 3% back (for Stash+) or 2% (for Stash Growth). Right now, these merchants are Netflix, Hulu, Disney+, and Spotify, but this list could change in the future.

Custodial accounts

Stash+ account holders can set up custodial brokerage accounts for children, who can access the funds when they're old enough.

What could be improved

Subscription fees

Stash uses a monthly subscription model, with fees ranging from $3 to $9 a month. Price is an important consideration when opening a brokerage account. For smaller accounts, monthly fees may end up higher than the percentage charged by other robo-advisors.

No APY on your bank account

Unlike other brokerages, uninvested cash doesn't generate interest. For most investors, this won't be a huge problem -- after all, money in Stash can be used to invest -- but it's something to consider if you're also using Stash as your primary bank account.

Stash customers can make unlimited commission-free trades. But you have to pay a monthly fee to use the service, either $3 or $9. A few dollars a month for a basic account may not seem like much, but converted into a percentage, it can be a considerable chunk of change -- unless you carry a large portfolio. Traditional robo-advisors might charge a management fee of around 0.25%, which works out cheaper than $12 a year.

You'll still pay fees on individual ETFs, which Stash builds into the prices you see. You may have to do some research to find out how much the fees come to.

Stash doesn't have more advanced research tools offered by other brokerage firms and some robo-advisors. Instead, Stash uses your initial questionnaire to recommend investments based on your risk tolerance. You can choose to follow their advice or go on your own. You may need to go outside of Stash if you want more detailed research on individual stocks and ETFs.

Robinhood and Stash both provide easy-to-use platforms targeted at beginning investors. And both brokers aim to break the mold by enabling ordinary people to buy stocks and shares. Robinhood offers a more robust investment platform, with stocks, options, ETFs, margin accounts, and even cryptocurrency.

If you want to use a margin account to increase your purchasing power, unfortunately, it's not an option with Stash. This is unlikely to affect long-term investors who use funds from their cash account to buy investments. Keep in mind you'll need to upgrade to a paid Robinhood Gold account to access margin trading. Gold accounts start at $5 a month.

Neither robo-advisor comes with access to mutual funds or individual bonds, although bonds are available as part of ETFs. IRAs are available as part of the upgraded Stash Growth and Stash+ membership levels. Robinhood only offers taxable brokerage accounts.

Robinhood's cash management account might be even better than Stash's bank account and debit card. Like Stash, customers get a free debit card and access to fee-free ATMs across the U.S. Robinhood accounts are also FDIC insured up to $1.25 million through partner banks.

Where the cash management accounts differ is in how they reward customers. Robinhood's cash management account is interest-bearing, earning competitive rates to rival some savings accounts. Robinhood rewards its customers for saving money, while Stash rewards debit card spending instead.

Robinhood and Stash are both good picks for new investors or individuals looking for a solid low-cost broker. The best choice for you depends on your investment and banking needs.

This brokerage is right for you if:

• You want to pick out your own investments and get automation. Stash lets customers manage their own investments, plus it gives you the option to use a robo-advising service
• You want access to fractional shares of stocks. The ability to buy fractional shares means you can start investing in your favorite stocks. You don't need to have enough money to pay for an entire share.
• You plan to keep a large portfolio. Keeping a sizable investment portfolio with Stash might be the only way to justify its monthly account fees.
• You are looking for a solid cash management account. Stash banking rivals many online checking accounts. It also gives you the ability to move money quickly into your investment account.

Compare Stash to other brokerages

Wondering how Stash stacks up to the competition? Check out our reviews:

At The Motley Fool Ascent, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and account types; however, we also take into account features like research, education, tax-loss harvesting, and highly rated mobile apps. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.

See our full methodology here: Ratings Methodology