In the past, to open an investment account on your own, there were few resources to help you learn what to do. Sure, there were things like brokerage accounts, but a brokerage account required that you had the capital to purchase stock and pay all the trading fees.
These days, it is much easier for the average person to get invested in the stock market with the amount of platforms, sites, and apps out there designed to help everyday investors. The Stockpile platform is one such technology that has enabled anyone to purchase and sell stocks.
Stockpile has one big twist – It allows you to purchase gift cards that can be redeemed for stock ownership. But is a Stockpile gift card enough of an incentive to use the Stockpile platform over the others out there?
Let’s give in with this Stockpile review and determine if a Stockpile account is right for you.
Stockpile History
Avi Lele, the CEO, and founder of Stockpile came up with the concept of the Stockpile website when he wanted to give his nieces and nephews something special for Christmas.
He realized that most kids have plenty of things that they don’t necessarily make the most use out of. Lele wanted to give the gift of something more meaningful and useful.
He wanted to give them stocks. However, stocks like Apple were too expensive for Lele to gift.
In the end, Lele bought his nieces and nephews more things. However, the idea of being about to purchase part of a share that could be given as a gift stuck with him.
Stockpile was created in 2010, bringing his idea to life. The purpose of Stockpile was to allow people to buy fractional shares of stocks that could be gifted to others.
Stockpile Fractional Shares: An Explainer
Let’s talk about fractional shares before diving deeper into our Stockpile review. If you wanted to buy stocks of Google, you’d need roughly $2800 for each share as of August 2021.
Most of us don’t have that kind of money sitting in our bank account to buy several shares of Google, much less give the gift of stock to someone else.
But fractional shares allow you to get ownership interest into companies like Google and Apple that you otherwise couldn’t purchase.
With fractional shares, you receive a proportion of the value of the stock, just like if you purchased a full share of stock. With the Stockpile app and others, you can purchase fractional shares for as little as $5 and own a piece of those highly desirable stocks.
Advantages of Fractional Shares
So what’s so good about having this ability to purchase fractional shares? Here are just a few of the benefits:
- Gives you more control – The ability to purchase fractional shares allows investors to have more control over much money they spend on stock. You can build an investment portfolio without having to put huge amounts towards one investment.
- Removes one of the biggest hurdles to invest – Being able to buy stock in parts allows more investors to get into the game. This is especially true for young or new investors who want to learn about investing with a hands-on approach.
- Allows you to build a more diversified portfolio – Since you can buy a variety of stocks with the money you have available, it could be easier to build a more diversified portfolio. This allows you to mitigate some of the risks that are involved in investing in the stock market.
StockPile Account Overview
Here is a rundown of what Stockpile’s platform offers:
- Minimum balance: $0
- Account Monthly Fees: 0
- Commissions: $0
- Ideal for: Young and new investors
- Key Features: Ability to purchase Stockpile gift cards
- Promotions (i.e. free stock): Not available
Stockpile has recently changed its pricing structure to no fees on stock trading. This was largely due to competitor offerings such as Robinhood that have a no trading fee structure.
You must be a U.S. citizen to open an account with Stockpile.
Stockpile Brokerage Account Features
Investment Types
Stockpile’s platform allows you to trade in exchange-traded funds (ETFs) individual stocks, and a few non- U.S. stocks which are called ADRs(American Depository Receipts).
You can buy ETFs that track securities like lithium and gold, but you can’t directly purchase commodities.
Investment types that are not currently offered by Stockpile include cryptocurrencies, mutual funds, futures, options trades, and forex.
Fractional Shares
Account owners of Stockpile have the ability to purchase fractional shares. That allows investors to access companies like Google, Amazon, and Disney stock without needing to make a huge investment.
Instead of purchasing individual stocks of these companies, investors can own a part of a share.
Stockpile Gift Cards
This is by far the single most compelling feature of Stockpile. It allows one to give the gift of stock to thereby using gift cards.
To do this, you must create a custodial account for the person to who you wish to send the gift card. A custodial account is for users who are under the age of 18.
Once the custodial account has been set up, all you have to do is send the stock gift cards to the child.
This is a great way to set up your kids and other loved ones with their first stock. It can also help get them interested in learning to trade stock. They have well over 4,000 stocks and ETFs available on its platform.
Physical cards can also be purchased from certain retailers.
Reinvesting Dividends
Among the strategies to build long-term wealth is reinvesting dividends. Using Stockpile, you can easily reinvest your dividends for free.
How a Stockpile Gift Card Works
The company that issues the gift cards is Stockpile Gifts, Inc. A gift card can be purchased as a physical gift card or e gift card.
The gift cards don’t have an expiration date so there’s no rush for them to be used. You can redeem gift cards at any time as well. This is true for its physical cards too.
In order to use the stock gift cards, the user must have a Stockpile brokerage account.
How does Stockpile Work?
Stockpile offers a desktop and mobile version of its service.
With the desktop version, you can do everything from setting up a new account, funding, purchasing, trading, and withdrawals. It’s all easy to use for beginners.
The mobile app is compatible with iOS and Android devices. You have the same functionality as you do with the desktop version.
It is easy to use the Stockpile app while on the go and on any supported device.
Is Stockpile Safe?
When using a mobile app or website like Stockpile to invest money, you want to know that you’re money and information are safe.
As a member of the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SPIC), Stockpile must follow all federal regulations.
Your deposits are also insured up to $500,000.
To protect and store your data, Stockpile uses 256-bit encryption. This level of encryption means that your information is secure.
You can have the peace of mind of knowing that Stockpile is a safe and secure place as an investing platform.
Stockpile Pros
User Interface
Stockpile’s user-friendly interface allows just about anyone to pick up and start using it without any trouble. Its simple to use which is a must considering the platform is used to give Stockpile gift cards to others (custodial accounts for users under 18).
You can easily use Stockpile for actions like trading stocks or transfer money from a bank account.
No Fees
You won’t pay a basic trading fee or annual fee to use Stockpile. They recently changed to this no-fee structure recently.
Due to competitors like Robinhood, it seems they have removed some of their fees just over a year ago. You no longer pay to purchase stock or sell them (previously it was $0.99 per trade) and debit card fee.
The only Stockpile fees you’ll pay are for things like making a domestic wire transfer, wire amendment/repair, paper checks, returned checks, ACH, wire, recall, stop payment, etc. These are all pretty uncommon transactions that most investors would not likely use.
In addition, there is no minimum account balance or minimum purchase on trades.
Stockpile Gift Card
The ability to buy a gift card to give to others is the main highlight of using Stockpile. There are few Stockpile alternatives that have this capability.
Buying a gift card is easy. You simply navigate to the “Buy” on the Stockpile website to bring you to the stock selection page. Then you can choose and buy stock.
Once that is complete, you can select the dollar amount of the gift card you wish to purchase. This is just like buying a gift card at the store.
The dollar amount options include $10, $25, $50, $100 or more. Then you enter the custodial account owner’s name and email address.
If you wish, you can also add an optional gift message for the gift card recipient.
You can pay by credit or debit card or even Paypal. Physical gift cards can also be purchased at retailers like Target, Safeway, Kroger, and other popular storefronts.
Custodial Accounts
Many of the new investment platforms don’t offer custodial accounts for their users. However, the availability of custodial accounts is a key feature of Stockpile.
It’s a necessary feature to allow Stockpile to offer its stock certificates that come in the form of a gift card. To send a gift card to someone who’s under the age of 18, the user must have this type of account.
Teaching Youth about Investing
Stockpile offers the unique ability to give young users stock gift cards that can get them interested in investing. Just like our grandparents may have been given savings bonds as investment tools, today we can gift stock with Stockpile.
Earning incentives like cash dividends could spur them to learn more about the stock market and encouraging good money habits.
Stockpile Cons
Lack of Investment types
When compared to others in the financial services industry, Stockpile’s investment selection is lacking. There is no access to mutual funds, crypto, and other investments that might be highly desirable by certain investors.
Limited Trading Window
Trades on Stockpile don’t execute immediately. That means that the trades occur at predetermined times during market hours.
As a result of this, you might not get the best price for a trade that’s possible. There is also a 15-minute delay on incoming data.
Charts that are accessible can’t display a time frame that is smaller than a day either.
Lacks Features for Advanced Investors
Stockpile should probably be avoided by those who consider themselves advanced investors because it simply does not have the tools that they value.
Raw data and research tools are minimal. There is also no real-time streaming data or advanced order types, basket trading, order routing options, or other features that advanced traders seek.
Final Thoughts: Stockpile Review
Now, let’s review Stockpile as an investing platform. Each aspect is rated on a scale of 1 to 5, with 5 being the best.
Trading Experience – 3.5
Stockpile is very easy to use and simple. The Dashboard when you log in allows you to see your current holdings and overall performance.
Tickers based on what’s trending, select specific industries, and top gainers can be viewed. If you click on a ticker’s tile, you can select how much money you want to invest in a stock.
With just a few more clicks, you can seamlessly execute a trade.
The charts, news, and basic performance stats can also be viewed with a couple of clicks.
Trading Technology – 1
Stockpile allows new investors to perform basic trading functions on limited research easily. However advanced investors will not find their platform to be a good fit.
All Stockpile trades at executed at pre-set times and you won’t have features like basket trading or real-time streaming data available to you.
Usability – 3
Regardless of whether you use the desktop or mobile version, you’ll have access to almost the same functionality. Since the platform is geared towards new and young investors, it’s easy to navigate.
Placing orders can be done easily on virtually every screen. Important functions like buying or redeeming gift cards, and bank transfers are easy to find.
There is a 15-minute delay on data and charts can’t view time frames that are smaller than the current day.
News and Research – 1
Experienced traders will be disappointed with the lack of research tools that Stockpile has. There are no studies, balance sheets, or analyst ratings to review.
The basic price charts for various time frames, 52-week highs and lows, dividend yield, and P/E ratios are all information you can find on every investor website.
The relevant news articles are also very limited.
Investment Offerings – 1
Stocks, ETFs, and some non-U.S. stocks that are also called America Depository Receipts (ADRs) are you only available securities with Stockpile. This is pretty limiting because you can’t directly invest in gold or other commodities or access cryptocurrencies. Options, forex, futures, and mutual funds are also absent.
Portfolio Analysis – 1
The only area where you can view the progress of your portfolio is the Dashboard. That tracking is limited to a single chart.,
Your legal and tax documents are available through the desktop version only. You can see your previous activity as well. However more detailed information like portfolio breakdowns, performance projects, and allocation options arent’ available.
Fees and Costs – 5
Stockpile has removed its trading fees and other costs like the debit card fee from its platform. There are also no annual fees to worry about.
Starting an account is easy with no account minimum or minimum balance requirements.
Security – 5
All your information is protected using 256-bit encryption. You can feel at ease knowing that they have these safeguarded in place.
The Securities Investor Protection Corporation (SPIC) has protection from broker failure. Up to $500,000 in cash and securities per customer is covered. This amount includes up to $250,000 in cash.
Customer Service – 3
Stockpile support is available by email. They don’t have a direct customer support number or chat feature.
You will notice a chat icon on their desktop and mobile versions. But this is simply a faster way to get email support.
In general, you should receive an email response within an hour, not over a week, or something like that.
Since their platform is easy to pick up and use, there really isn’t a lot of need to contact their support team.
Stockpile’s Help Center page should answer most questions that a user might have about investing basics or how to use the platform.
Bottom Line: Stockpile
All in all, Stockpile has a fairly limited audience that it may attract.
For new and young investors, Stockpile is a good way to get into the world of investing. They are geared towards beginners and youth that appreciate simplicity.
Parents that wish to get their kids interested in investing could use the gift card feature for this purpose. The ability to purchase a physical card is also a nice way to make it more tangible.
But if you’re an experienced or advanced trader, Stockpile is not the right place for you. The limited investments, features, and research will frustrate them.
Investors who wish to have access to more flexible features and capabilities such as investing in crypto or don’t have a reason to buy gift cards for youth should also steer clear.
