We both know that trading stocks can be a complicated and confusing process. That’s why I decided to write this Stockpile review.
Many people are afraid to begin learning about investing because of the inconvenience, difficulty, and mystique surrounding the entire process.
In fact, most people are not introduced to the world of investments until they are ready to begin saving for retirement…
…I think that is far too late!
So, it’s important to pick the right brokerage account. Today, I will give you all the pros and cons of Stockpile, then you can decide if it’s better than Robinhood.
BTW. If you are going to open a Stockpile account, use the link at the bottom and they’ll give you a FREE stock.
Trading stocks is something that I began in college, and have continued to do well after.
Investing in stocks can be challenging, fun, and above all, very important in meeting your financial goals.
Given the importance of investing, we have a responsibility to teach ourselves and the next generation the basics of this topic.
And since the holiday season is fast approaching, wouldn’t it be nice to kill two birds with one stone?
So, this year, instead of buying your loved one’s toys, sweaters, or even socks…
…wouldn’t it be great if you could give them the gift of stocks?
Well, now you can
…with a little company known as Stockpile!
And today we’re here to answer the question “is Stockpile a good move?”
It was Christmas and Stockpile founder, CEO Avi Lele, wanted to give his nieces and nephews something special.
Now, most kids have enough crap – but Santa don’t care – he just keeps bringing kids more crap.
Lele realized this phenomenon and became determined to give his loved ones something useful for the holidays. And, by something useful, we mean stocks.
But the stocks Lele wanted to gift – Apple and Google – were far too expensive.
The kids were good, but not that good. Lele wished that he could somehow purchase part of a share and give it as a gift.
Lele ultimately gave up and bought his nieces and nephews more crap.
But, he knew that he was on to something…
…and in 2010, the brokerage firm Stockpile was born!
Lele created Stockpile with the intention of gifting fractional shares of stock to other people.
So how does Stockpile work?
Stockpile allows people to…
- Buy and sell stocks (like normal)
- Purchase gift cards that can be used to purchase fractional shares of household-name stocks and ETFs
These gift cards can be purchased on the Stockpile website and given to others as gifts.
Why do these gift cards make excellent gifts?
Because Stockpile has effectively created a way to…
…introduce people (especially younger generations) to investing.
But how can you possibly give someone a fractional share of a company?!
Stockpile’s CEO on Mad Money with Cramer
What are fractional shares?
Fractional shares present an excellent option for people that want to gift a valuable stock…
…but don’t want to pay for an entire share.
This form of investing is relatively new and has become a trendy choice for people with brokerages that offer this feature.
Here is how it works… (you can also read my fractional shares post)
Let’s say you want to purchase Amazon.com, Inc., which trades for around $1,500 per share.
You realize – that is way too much money for one gift!
However, with Stockpile, you can purchase a fractional share as small as $5!
You still receive a real ownership interest in your chosen company, but without breaking the bank.
Stockpile then collects these fractional shares and executes trades for entire shares, based on customer purchases, at the end of each day.
The owner of the stock will receive the same value increase (or decrease) in proportion to their fractional share – it works the same as if you purchased one full share of stock.
Also, you can purchase fractional shares of multiple companies and begin learning the value of diversification!
We particularly like Stockpile as a learning tool, mainly because of the option to purchase fractional shares.
Because it is a relatively risk-free way to learn the ins and outs of the market!
If you are more interested in robo-advisors, check out our review posts of Stash, Acorns, Wealthsimple.
Are there fees involved?
Short answer – yes, there are fees involved.
However, the Stockpile fees are competitive compared to other brokerage firms.
Being a cheap investment option is not Stockpile’s value proposition – but it is an added bonus.
Instead, Stockpile’s primary selling point is that they give you the ability to purchase a gift card for tons of stocks on the market.
The purchaser of the gift card has the responsibility to pay the fees for each transaction.
The e-gift card fee for the first stock is $2.99. Additionally, there is a “swipe” fee for 3% of the purchase.
For example, if you purchase a $100 gift card, the debit card fee would be $3 plus the additional $2.99 making your purchase $105.99.
The physical gift card is more expensive compared to the e-gift card.
For the same $25, $50, or $100 gift card, the costs for each would be…
- $25 ($29.95 after fees)
- $50 ($56.95 after fees)
- $100 ($107.95 after fees)
Shipping is also charged for physical cards (but three or more cards ship for free!).
The fee to execute a trade is just 0.99 cents per trade.
This trade price is a bargain compared to other brokers that charge upwards of $6 per trade.
However, when you execute a trade, it is not “live.”
As mentioned earlier, the company makes trades with a delayed execution.
What markets can I invest in?
There are many different markets to choose from…
…but Stockpile operates exclusively in U.S. markets.
For this reason, Stockpile is limited to the options that they provide specifically when it comes to the number of investments offered.
However, the company does offer…
- Every stock in the S&P 500 (the brand-names you want!)
- Several thousand stocks from the NASDAQ
- ADR and ETF options
Stockpile does not offer any cryptocurrency (you can already buy fractions of those), bonds, or foreign market stocks.
However, we view this as a positive because beginners can avoid getting bogged down by too many options.
With that said, there are indeed no shortages of options to choose from!
Is Stockpile Safe?
When it comes to investing money…
…you need to know that your information and money are safe.
So is Stockpile safe? Is Stockpile legit?
Well, while countless people find trusting brokerage firms difficult, there are governing bodies that regulate companies like Stockpile.
Stockpile is a member of both the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC).
But why does that matter?
It matters because your deposits are insured up to $500K, and the company must follow all federal regulations.
Additionally, Stockpile uses 256-bit encryption to store and protect your data.
This level of encryption means all of your data is well-secured.
All sites – both public access and private accounts – are also protected with TLS 1.3. TLS 1.3 is one of the most reliable encryption tools available.
So, rest assured – you can rely on Stockpile to keep your information safe and secured!
How can I use Stockpile?
The platform that a brokerage runs can be one of the most critical factors for customers using brokerage services.
You have two options when using Stockpile’s platform…
Stockpile has an easy-to-use desktop platform that is great for new investors.
Everything, including account set-up, funding, purchasing, trading, and withdrawals are beginner-friendly.
Investors can learn the terms and navigate through the site quickly and efficiently.
The systems are not very complicated which is great for new users. Overall, the desktop version is very straightforward.
Stockpile also offers a mobile app that is compatible with Android and iOS systems.
This app provides the same features that you can get while using the desktop version.
In the app, you can check portfolio performance, make a deposit, request withdrawals, redeem gift cards, and even place your trades.
This feature gives users far more accessibility as Stockpile’s platform can be used anywhere and on virtually any device.
Can I learn about the stock market?
Understanding the markets as a beginner can be challenging…
…even experts have to be life-long learners of the markets.
Life-long learning is required because investing and the stock market are challenging and ever-changing subjects.
Fortunately, Stockpile has a downloadable app that can help users along the way.
The app walks users through different lesson plans and teaches them the basics of the stock market. These lessons range from beginner to advanced traders.
The app also provides market updates from Forbes, CNBC, The Wall Street Journal, and Consumer Reports.
These market updates can help people determine if they should purchase their fractional share or hold off.
This educational feature is something we love because it teaches users the risks of the market, the changes that can occur on a daily basis, and how their shares gain and lose value.
What are the special features?
Of course in this Stockpile review I will present some downsides.
So, unfortunately Stockpile does not come with many additional features that other brokerage services do not offer.
However, this is good because it prevents users from feeling overwhelmed.
Unlike many other platforms, Stockpile gives you the option to fund your account using credit and debit cards. Credit card funding is not typically available on most other online platforms (albeit for a good reason).
While using a credit card for investing can be risky, it does make this investment platform more accessible to a broader range of people.
Overall, Stockpile does an excellent job of not overwhelming new investors with too much information.
All of the information is easy to understand, which helps users decide what to buy based on their knowledge.
However, this could be a disadvantage for people looking to create a long-term portfolio because they don’t have the tools to forecast into the future. The lack of forecasting tools could force people to research other websites and then place their trades on Stockpile.
Here are some of the tools available on Stockpile’s website…
- Performance Chart. Provides necessary information on company performance.
- Company Fundamentals. Includes information like High and Low prices; P/E Ratio; Dividend amounts.
- Users can create their own stock watchlists.
- Related News. Users can create a list of daily news articles.
- Curated Lists. Users can see the best and worst performing stocks.
- Users can search for articles on market movements, financial strategies, and more.
How is their customer assistance?
Getting answers to an urgent question can be a challenging task.
Fortunately, Stockpile offers a built-in chat function that informs a team member of your question. A member of the company will respond within 24 hours.
There are no physical locations where customers can go to for help with their accounts.
However, this is part of what keeps the cost of Stockpile so low. The company also does not offer phone services, which can make people wary of using Stockpile’s systems.
The company does not have active traders because they execute all trades at the end of the trading day. Therefore, there is not much of a need for live customer service representatives.
Lastly, Stockpile does have active social media accounts, such as Facebook and Twitter.
You can use these platforms to read about company updates and offers for new tools and features.
How to purchase a gift card
Stockpile seeks to make investing more accessible for all ages. This accessibility aims to reach children, teenagers, and adults.
The company provides easy account access and opening your account is a breeze. You can set-up your first brokerage account in three simple steps…
1. Open an account to purchase a gift card (use this link)
- You must be a citizen of the United States.
- You can choose to open a custodial or a taxable account.
- For custodial accounts, the primary user must be over the age of 18.
Pro tip: use this link to create an account and Stockpile will gift you a FREE stock.
2. Add your bank account information to fund the new account
- You can do this by linking your bank account or using a credit/debit card.
3. Purchase a gift card
- You can purchase gift cards online and in-stores (including Safeway and Target).
- E-cards have face values of $10, $25, $50, $100 or a custom amount, up to $2,000.
- You can choose an e-card or physical card (at an additional cost).
Of course, we recommend the physical card if being given as a gift.
Additionally, each stock, ETF, or ADR has its own gift card with a unique look.
What I love about Stockpile
- The gift cards are easy to obtain, and the platform is easy to use.
- You can purchase in-store or have the gift card shipped directly to your home.
- You can buy a fractional share for as low as $5.
- There is also no minimum balance to carry with your account.
Low trade fees
- Trade fees are small compared to industry standards.
- You can execute a trade for just 0.99 cents.
Ease of use
- The trading platform is easy to use for beginners.
- There is an app and desktop site.
- Stockpile has an app that works for both Android and iOS.
- The app provides the same functionality as the desktop site.
What I don’t love about Stockpile
- The company only offers select stocks, ETFs, and ADRs available in the U.S.
- The company cannot fulfill orders immediately.
- The company must wait until the end of the day to combine fractional shares and execute the trades.
Limited educational resources
- The ‘Learn’ section is primarily intended for people that are very new to the markets.
- There are not many educational materials for those that have an intermediate to advanced understanding.
Limited research tools
- There are no tools or charting that allow for a detailed understanding of a stock.
- These tools could include things like RSI, MACD, or moving averages.
Stockpile review Summary
New investors may find large firms such as TD Ameritrade, J.P. Morgan, and E*TRADE confusing.
Learning to invest by the dollar (instead of by the share) creates a simplified version of investing that new investors can use to learn quickly.
By investing small amounts, you can see the benefit of saving money early and often.
Additionally, you do not need to break the bank to learn this lesson.
The ability to save money makes Stockpile ideal for younger generations because it teaches them the basics of investing at a very low cost.
As a bonus, you can help get people interested in investing at an early age.
Stockpile is an excellent way to get young people involved and understanding the complicated, and sometimes downright confusing, world of investing.
Instead of discovering stocks in college…
…I could have been buying and selling in grade, middle, or even high school.
Unfortunately, nobody introduced me to the stock market until my sophomore year in college!
Learning this lesson early on could have helped me discover my passion at an earlier age.
This idea also reminds me of something from back in the 90s…
…when my grandparents would purchase bonds and give them to me as gifts.
I later used these bonds to help pay for college, but they barely kept up with inflation
Well, in 2018, you can give the gift of stocks!
Stocks have significantly more potential to increase in value compared to bonds. Heck, if you buy the right stock at the right time, maybe you can skip college altogether.
Well, maybe not…
…but now I want to know what you think.
Is Stockpile good as far as brokerages go? What will you be giving your loved ones for Christmas this year?
Let us know your thoughts down below!