Stockpile is an online, app-based brokerage that is committed to getting people, but especially kids, interested in stock investing. It offers customers the very unusual opportunity for fractional share trading: purchasing less than one share of stock. Their specialty is gift cards that are redeemable in stock. A Stockpile app review shows that there is a Stockpile calculator app and a Stockpile measurement app to boost beginning investors in their Stockpile trading. They begin to learn how to use Stockpile is an excellent Beginner’s Guide.
What is Stockpile?
Started in Palo Alto, California, in 2010 and now headquartered in Glendale, the company is the brainchild of Avi Lele. The story goes that he wanted to give his nieces and nephews not more “stuff” for gifts but shares of stocks. But it was too expensive to buy even one share of the stocks he wanted (Apple and Google). That gave him the idea for Stockpile and the new idea of offering fractional shares and gift cards.
What Stockpile Offers
Anyone can open a brokerage account at Stockpile. The only two available accounts are a regular individual brokerage account or a custodial account. Kids are able to own securities, including stocks, if an adult is a custodian responsible for the account. Stockpile makes it very easy to open and manage such an account using its app.
Once the account is open, it can be funded by linking it to a bank account or straight from a debit card (Stockpile recommends in either case linking a bank account in case it becomes needed). The kid who owns the account (and will take it over at age 18) is able to log in separately to see how his investments are doing and to “buy” stock. The actual purchase occurs only when the custodial adult has approved it
Buying part of a share of stock is not something most people with a brokerage account can do. Stockpile has arranged this fractional purchasing of thousands of stocks and ETFs, including every stock in the S&P 500. ETFs, or exchange-traded funds, are like mutual funds in that they hold the stock of many different companies, diversifying your investment, but ETFs trade exactly like stocks, purchased and sold at the going market price on a stock exchange. Stockpile does not allow trading such as options, futures, or currencies (Forex).
Stockpile has stirred up a lot of excitement in the financial press because they allow kids to fully participate in the account and receive from any adult a gift card to buy more stock. (The gift card itself is not the stock. The recipient must log in to a Stockpile account—or open one—to purchase the stock.)
Keep in mind that custodial accounts for children are a chief focus of Stockpile. The accounts are a way anyone can get and own stock in any dollar amount (purchases between $1 and $100). So other companies and organizations of any kind can give employees accounts and stock as special bonuses to reward loyalty, or engage customers—to name a few examples.
Starter Individual Accounts
The company’s brokerage accounts enable any individual to get started in investing in stocks. Such a start, as early in life as possible, has the huge benefit of compounding investment gains over many decades. Each year’s gains become that much more to invest in the next year. Even a small start in investment, if it becomes regular and continues until retirement, can produce remarkable wealth.
The company’s custodial accounts for children, managed by an adult, are a perfect place to begin that power of compounding investment. Stockpile gives the kids online access to their accounts, where they “buy” stock if their purchase is confirmed by the adult custodian. In effect, any kid can own stock in any major company in America and new, popular public companies are quickly added to those available on Stockpile. Customers can request that Stockpile add a stock not yet available on Stockpile.
If Stockpile has a single unique value proposition, it is gift cards for the purchase of stock for a Stockpile account. These can be given to anyone, with the purchaser (and gift-giver) designating the stock purchase. The recipient goes to Stockpile to make the purchase, which does not have to be that designated.
How Much Does Stockpile Cost?
Stockpile offers a membership of $4.95 per month to open 1 adult and 5 children’s accounts. Following other online brokers, it has eliminated commissions and also trading account fees. Nor is there any minimum balance for an account. The fees that Stockpile charges cover outgoing cash (domestic wire) transfers.
Stockpile abides by the “what you see is what you pay” rule, so you can choose any stockpile gift card (up to $500 value) and pay no gifting fees or debit card fees. You pay only the amount of the gift card you are gifting! Consequently, your recipient will also not pay any trade commission fee when they redeem it.
How to Start Investing with Stockpile
Visit the Stockpile’s website and buy any gift card without opening an account. The recipient of the card, however, must have a Stockpile account or open one to use the card. Opening an individual or custodial account is easy. You can use the account almost immediately if you use a debit card to fund it. Stockpile recommends that instead or in addition, you link the account to a bank account. There are no costs of any kind until you have opened an account and are making our first stock purchase. It makes Stockpile a good investment.