Stash, an personal finance app which makes it easier for millennials to save and invest small amounts of money, is taking a page out of rival Acorns' book as it tries to add more customers.
The company announced Thursday that it has unveiled a number of new features for its users, including round-ups — which lets customers invest spare change— and cash back for purchases made at certain retailers.
"Round-ups," lets Stash users round up daily purchases to the nearest dollar and automatically add the difference to their personal investment accounts. For instance, if you made a purchase of $6.55 at the nearby grocery store, the app will automatically round up the transaction to $7 and transfer the $.45 to your Stash investment account. It's similar to a feature offered by investing app Acorns, which announced this week a $105 million funding round that values the company at $860 million.
The other feature, named "Smart-Stash," uses algorithms to learn about users' spending patterns and saves money where they can. Customers can also earn bonus rewards on everyday purchases if they link their credit cards or debit cards to Stash's app, which offers up to 10% cash back on spending the money at selected vendors.
A representative for Acorns wasn't immediately available to comment on Stash's new product.
A slew of fintech companies, from Stash to stock brokerage app Robinhood, are aiming to lower traditional barriers and get less-affluent Americans to invest. Top fin tech investors told Business Insiderthat they expect financial inclusion to be a major theme in 2019.
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Brandon Krieg, CEO and co-founder of Stash, said Stash's focus on educational content sets the app apart from industry competitors.
"Tens of millions of people in this country are effectively excluded from investing, saving, and engaging with financial services," he said in an interview with Business Insider."We think our customers make up 100 million people in the US alone because financial literacy and access are just not available to so many people now. So we created the platform where you can not only [start] investing, saving, and banking, but also learn why you do it and get advice."
Stash allows users to open an investment account with as little as $5. The company's goal is to change how people engage with financial services and empower those who lack knowledge of investments and wealth management, Krieg said. About 86% of Stash users identify themselves as first-time investors.
Right now, Stash charges users a $1 service fee per month and an additional 25 basis points for accounts over $5,000. It also charges $2 a month for retirement products unless the user is under age 25. Last year, the company expanded into banking through its partnership with Green Dot Corporation and offers bank accounts with no overdraft fees and free access to ATMs.
Read more: A free investing fintech is launching a checking account to try and steal Main Street customers from big banks
Stash has raised $117 million in total from investors including Union Square Ventures, Breyer Capital, Coatue Management, Entree Capital, Goodwater Capital and Valar Ventures.
Founded in February 2015, the four-year-old New York upstart has amassed 3 million open brokerage accounts and around $530 million in assets under management. Acorns, in turn, has more than 4.5 million customers and over $1.2 billion in assets. The company was started by father-son duo Walter and Jeff Cruttenden in 2012. Both companies lag the biggest robo-advisor Betterment, which has $15 billion in assets under management, and brokerage giant Charles Schwab Corp, which handles $3.25 trillion of clients' money.
But while fintech companies may have fewer customers than large brokerages, they're still putting pressure on incumbent players to increasingly cater to younger investors with lower fees.
Last year, JPMorgan rolled out a new stock trading featureto offer in some cases zero-commission stock trades. Vanguard also announced to offer a platform of free exchange-traded-fund trading, and Fidelity said that it was launching a zero-fee index fund.
FAQs
Acorns is a platform that allows individuals to participate through micro-investing using spare change. The company offers retirement savings accounts, a debit card, and banking services.
Which is better, Stash or acorn? ›
In general, Stash is most likely to appeal to DIY, hands-on investors, while Acorns tends to be a better fit for investors who want to outsource management of their investments. But Stash also offers a managed portfolio. Below, a full comparison of Stash and Acorns.
What three things the acorn and Stash app have in common? ›
Stash and Acorns both offer individual brokerage accounts, retirement accounts, custodial accounts, and a personal banking account that comes with a debit card.
What is the Stash app used for? ›
Stash aims to help people build long-term wealth. For a monthly fee, users can access a robo-advisor investing service, retirement and brokerage accounts and a bank account with a debit card that earns stock rewards.
Can you actually make money on Acorn? ›
Acorns has over 8 million customers and $3 billion in assets under management. The app lets its users make money and build wealth through long-term investing. You can also make free money with Acorns by shopping at 350+ Acorns Earn partners.
How risky is Stash? ›
All Stash accounts are held by our trusted partner and custodian Apex Clearing, a registered broker-dealer regulated by FINRA. At Apex, your investments are protected up to a maximum of $500,000 total, including $250,000 in cash balances through the Securities Investor Protection Corporation (SIPC).
Can you really make money with Stash? ›
With the Stash Growth plan, you can earn 0.125% Stock-Back®, and the Stash+ plan pays 1% Stock-Back® on the first $1,000 you spend monthly. Both plans offer bonuses of up to 2% and 3%, respectively, at certain merchants. These Stock-Back® rewards actually give you shares of stocks at the companies you shop at.
Is Stash safe to invest in? ›
Your accounts with us are insured to the regulatory limits by the Federal Deposit Insurance Corporation (FDIC). For further information regarding insurance of accounts, you can telephone the FDIC's toll-free consumer hotline at 877-275-3342, or find alternate contact information at www.fdic.gov.
Which is better Robinhood or Stash? ›
Robinhood comes down to your personal preferences and what features you want most in an investing app. Stash is the most suitable for brand-new investors who need support getting started and investors who want to invest for the long-term.
Is there a better app than Acorns? ›
Why we chose Chime: If you want an Acorns alternative that has numerous bank-like features to help you spend and save your money, Chime is for you. And our favorite part is that its high-yield savings account currently pays 0.50% APY. Like Acorns, you can also enable spare change round-ups to automatically save money.
You only need a few things to get started with Stash: Four dollars ($4) – $3 for your monthly subscription fee and at least $1 to put in your Personal investment account. A bank account with a U.S. bank. A Social Security number.
Why can't I withdraw my money from Stash? ›
There are four factors that may impact your ability to transfer out of your Stash Personal Brokerage portfolio: Invested funds: If you want to transfer money you've invested, you'll need to sell those investments first. Unsettled sales: Funds from an investment sale will take two business days to settle.
Who owns the Stash app? ›
Stash was founded in February 2015 by Brandon Krieg, David Ronick, and Ed Robinson. It was launched on the iOS App Store in October 2015 and made available on Android in March 2016.
How do I stop the stash app from taking money? ›
To cancel your Stash subscription, just follow these three steps: Go to https://app.stashinvest.com/manage-subscription/manage. Log in to your Account. Click Cancel My plan.
Is the Acorns app really worth it? ›
Acorns is best for beginners looking for passive investing strategies through a mobile robo-advisor. Users can open regular brokerage, retirement, and custodial accounts on the same easy-to-use platform for a low monthly fee. Beginners can also benefit from Acorn's educational resources and guides.
What are the benefits of using Acorns? ›
Pros
- $0 minimum deposit to open an account.
- Invests your spare change from everyday purchases.
- Customizes users' portfolios around their financial goals, timeline and risk tolerance.
- Automatically rebalances portfolio.
- Offers Acorns Sustainable Portfolios for ESG investing.
The Acorns website and the Acorns app are secured with 256-bit encryption. Acorns is a member of SIPC. Securities in your account are protected up to $500,000.
Does Acorns charge a fee to withdraw? ›
No, Acorns does not charge fees for withdrawing funds from your investment account.
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