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Updated on Wednesday, February 5, 2020
Stockpile is an online investing platform that lets new investors build a portfolio using fractional shares. With fractional shares, you purchase only a small part of a single share of a publicly traded company. This approach provides big cost advantages, letting people invest with any amount of money. Especially when purchasing shares in some of the most popular companies traded today — like Google parent Alphabet Inc, which as of writing was trading above $1,400 a share.
Stockpile’s other marquee feature is the ability to give shares as a gift. You can purchase an e-gift card or physical gift card that’s redeemable for stock shares. It’s a great way to introduce kids to the building blocks of investing or simply gift stock to anyone.
Who should consider Stockpile
Stockpile is best suited for beginning investors who are just dipping their toes into the market. The biggest selling point is that you don’t need a lot of money to invest, since you’re not buying full shares of stock.
You might want to invest in a big-name stock like Amazon Inc., which sells for over $1,800 a share as of writing. But you may only have $100 a month to invest.
At that rate, you’d need to wait well over a year to save up enough to buy a single share of Amazon, assuming the price stays the same. With fractional shares, you can invest $100 each month and work your way up to owning a full share of Amazon, one step at a time.
In that respect, it’s similar to some of the micro-investing apps that have grown popular, such as Acorns or Stash. These spare-change apps let you invest with small amounts as well. The difference is that they tend to focus on exchange-traded funds (ETFs) and prebuilt portfolios as their main investment too, rather than encouraging investors to buy fractional stock shares.
Stockpile allows you to invest in more than 1,000 U.S. companies, ETFs and foreign companies, including every component of the S&P 500. Many of the stocks are names that should be familiar to most people, including Amazon, Disney and Google. Investors pay $0.99 per trade to buy and sell shares.
Stockpile trading platform and tools
Stockpile’s trading platform is user-friendly in terms of how simple it is to use. You create your account, link your bank account and from there, you can begin buying stocks and ETFs.
You can manage your account online or through the Stockpile app, which is downloadable for Android and iPhone. The interface is streamlined and simple. You can use the app or go online to:
- Buy stocks or ETFs
- Track the performance of stocks and ETFs you’ve already purchased
- Estimate an investment’s growth potential over time
It’s all very basic, which might appeal to an investor who feels overwhelmed with all the bells and whistles other trading platforms offer. On the other hand, a more advanced investor may be underwhelmed by the lack of features, such as real-time trading data, forecasting tools or an extensive library of stock and investment research.
In terms of customer service, Stockpile relies on online chat and email to communicate with investors. Phone support isn’t available but that’s one of the ways Stockpile tries to keep costs as low as possible for investors.
Stockpile investment options
With Stockpile, your investment options include:
- ADRs, which are foreign stocks that trade on a U.S. exchange
That’s a good starting lineup for new investors, but that’s where the variety ends. A respectable number of publicly traded companies are available, but it’s a subset of the overall market. You won’t find other asset types here, like bonds, index funds, hedge funds, forex or other options.
In terms of fees, here’s what you’ll pay to trade:
- $0.99 per trade to purchase stocks
- $0.99 per trade to sell stocks
If you’re purchasing gift cards for stocks to give to someone else, here’s what you’ll pay:
- $2.99 for the first stock, $0.99 for each additional stock
- 3% debit/credit card processing fee
- $4.95 to $7.95 fee for physical gift cards
It costs nothing to redeem a gift card purchased from Stockpile. There are also some miscellaneous fees to be aware of, including a $30 returned check fee, a $5 paper check fee and a $75 fee to transfer your account assets to another brokerage.
Investing for kids with Stockpile
While Stockpile can be used to invest for yourself, the platform was initially developed as a way to gift stocks to kids. If you’re a parent with young kids or teens, that’s something you might be interested in.
There are two steps you can take to help kids invest through the platform. The first is to purchase Stockpile gift cards, which can then be redeemed for stocks.
You don’t need an account to do this. All you do is:
- Select the stock gift card you want to purchase
- Choose a dollar amount (the maximum is $2,000 for printed or e-gift cards; maximum $100 for physical gift cards)
- Decide whether you want to print out a paper receipt showing your certificate amount, email your gift card or choose a physical gift card
- Pay for your stock gift card with a debit or credit card
Remember, you’ll pay a $2.99 fee, plus 3%. So for a $100 gift card purchase, the fee comes to $5.99. And if you’re requesting a physical gift card, you’ll pay an additional fee ranging from $4.95 to $7.95, depending on the card.
The second part of investing for kids with Stockpile is setting up a custodial account that stock gift cards can be redeemed into. A custodial account is technically owned by the adult on the account until the minor comes of age.
One interesting feature is that kids and teens can set up their own trades through the custodial account. They just have to be approved by the adult listed on the account for those trades to be executed. They can also create a wish list of stocks they’d like to own to share with family and friends for future gifts. It’s a hands-on way to get kids interested in and learning about how the stock market works.
Strengths of Stockpile
- Low barrier to entry: Investing in a mutual fund at a traditional brokerage might require a minimum initial investment of anywhere from $500 to $10,000. Stockpile has no minimum requirements, making it an accessible way to start investing.
- Ease of use: The online interface and mobile app are easy to navigate and not overwhelming for someone who’s new to investing online.
- Fractional investing: While there are a number of micro-investing apps out there that allow for investing small amounts, not all of them offer fractional shares. Stockpile makes it possible for an investor with even a budget to own their favorite big-name stocks.
- No monthly fees or annual fees: At other online brokerages or robo-advisors, you might pay a monthly or annual management fee. Stockpile has no monthly or annual fees.
Drawbacks of Stockpile
- Limited selection: While Stockpile offers more than 1,000 stocks and ETFs, other brokerages have a much wider variety. E-Trade, for example, offers stocks, bonds, mutual funds, futures, options, ETFs and prebuilt portfolios.
- Trades aren’t free: At first glance, $0.99 per trade doesn’t seem like much. But when you consider that other brokerages now charge $0 commissions on stock trades, frequent trading could add up.
- No retirement accounts: Currently, you can only open an individual or custodial taxable account with Stockpile. Joint accounts and IRAs aren’t an option.
- Limited research tools: If you download the Stockpile app, you’ll have access to mini-lessons on investing and performance charts for individual stocks. But in the way of research, that’s about it, which may be disappointing to some investors.
Is Stockpile safe?
This is always a good question to ask when investing online and the answer is yes. Stockpile is registered with the SEC and is a member of FINRA and SIPC. Being a SIPC member means your account is insured for up to $500,000, including up to $100,000 of cash, in the event that the company goes under. You’re not, however, insured against losses due to market fluctuations.
In terms of internet security, Stockpile encrypts and protects investors’ personal information, including your Social Security number.
Is Stockpile right for you?
Stockpile offers a no-frills way to start investing in stock using fractional shares and to gift stocks to friends and family members. No minimums and no monthly fees might appeal to investors who want a budget-friendly way to start building a portfolio. That should be weighed against the $0.99 per trade fee and the overall range of investment options.
Stockpile could be a great place to get your feet wet with purchasing stocks or teaching kids and teens the basics of investing. But if you have an interest in more advanced trading strategies or you want to open an account to invest for retirement, another online brokerage could be better suited to your needs.
Fees mentioned in the article are accurate as of the date of publishing.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.