Are you tired of giving the kids in your life useless gifts that end up in the trash?
Would you rather help them learn valuable financial and investing lessons that can last a lifetime?
If so, check out Stockpile — an innovative investing platform that lets you purchase stock gift cards that represent fractional shares of stocks in popular companies like Amazon, Nike, Coca-Cola, and Netflix.
A fractional share is less than a full share of a stock. In this case, Stockpile lets you buy a whole sum, say $20 or $100 worth of a stock, rather than the minimum price of a single share, which may look something like $187.34.
Of course, you don’t just have to give Stockpile share as gifts; you can also invest in this platform yourself.
Either way, Stockpile offers something every investor wants: the opportunity to buy stocks with low fees and the ability to monitor your growing wealth in real time.
How Stockpile works
We already explained that Stockpile lets you buy fractional shares of popular stocks, but it’s important to note the benefit of this strategy.
Since many stocks are often expensive, Stockpile lets beginning investors buy into stocks they couldn’t afford otherwise.
As an example, stock in Amazon.com could cost $1,000 per share at any given time.
This price point makes it unrealistic as a gift and expensive for even the average investor.
But, with Stockpile, you can buy a gift card of Amazon stock and own a fractional share with a much smaller commitment, like $25, $50 or $100.
From that standpoint, the low barrier of entry with Stockpile is a huge plus.
Once you’re ready to invest with Stockpile, your first step is opening an account and connecting it with your bank.
That way, you can move money easily when you’re ready. Once you open a trading account, you can buy and sell whenever you want.
Stockpile’s innovative trading platform also lets you monitor your accounts and their growth in real time.
They also charge only $.99 per trade, which is a lot less than many if not most of their competitors.
But, where can you invest? According to Stockpile’s FAQs, you can use their platform to invest in 1,000 stocks, ADRs, ETFs.
This includes every stock in the S&P 500. Further, Stockpile lets you buy stock with a credit card, a debit card, or even Paypal if you want.
If you want to get on a steady investing schedule, you can even set up recurring investments that are automatically bought on your behalf using the form of payment you specify.
There are also no fees for setting up a recurring investment.
You can just set it and forget it.
Opening a Stockpile account for your kids
One of the most intriguing aspects of the Stockpile investing platform is the fact it is ideal for kids.
Parents can open an account for their children provided there is also an adult on the same account.
This type of account is called a custodial account, notes Stockpile. Once it’s opened, the child will own the stocks but the adult holding the account jointly maintains legal responsibility.
Stockpile also makes it easy to “gift” stock via an e-gift card or a physical gift card redeemable for stock.
This option makes it easy for you to give your kids investments for their birthdays and holidays instead of junk toys they don’t really need.
From there, your child or teen can have their own online account access and monitor their investments as time goes on.
This strategy can help kids learn about investing and the power of compounding early while also helping them build wealth they will appreciate once they are an adult.
How to Give the Gift of Stock with Stockpile
If you’re someone who loves the idea of giving the gift of stock, doing so is easy once you open a Stockpile account.
Simply create a free account and fund it with your chosen method of payment.
From there, you can choose a stock gift card and a recipient.
If the gift recipient has an email address, you can send their stock gift card via an e-gift card.
If you would rather present them with a physical gift card, you can order those through Stockpile as well.
When you buy a stock gift card through this platform, however, you will incur some fees.
If you give an e-gift card, you’ll pay a $2.99 fee for your first stock.
If you want a physical stock gift card you can present in person, you’ll pay a varying amount based on the size of the gift.
If you purchase a physical gift card for $100, for example, your fee is $7.95. If you opt for a $50 gift card instead, you’ll pay a $6.95 fee. For a $25 gift card, you’ll pay $4.95.
In addition to these fees, you’ll also pay shipping on physical gift cards.
But shipping is free if you buy three gift cards or more at a time.
Keep in mind that there is also a 3% debit or credit card funding fee.
This fee can really add up if you are buying stock as gift frequently and remember that it doesn’t add any value to the transaction.
Benefits of investing in Stockpile
It’s easy to see why investors who want to give the gift of stock would flock to Stockpile.
There are plenty of advantages for investing through this platform for yourself, however.
Here are the main benefits of both strategies:
- It’s easy to give stock as a gift: Stockpile makes it easy to give stock as a gift with either an e-gift card or a physical gift card you can receive in the mail and wrap up like a traditional gift.
- Low trading fees: It only costs $.99 per trade with Stockpile, which is a lot less than most online brokerage firms charge. If you’re someone who likes to trade a lot, these low fees can help you save money over time.
- Help young people learn about investing: Learning about investing early can help kids and teens make better decisions with their money later in life. Stockpile’s innovative platform can help kids learn about investing by doing. Kids can also monitor their progress and returns through Stockpile’s online platform. Stockpile's interface is very easy to use, and the graphs make it simple to explain stock investing — including to adults!
- Plentiful investing options to choose from: Stockpile lets you invest in every stock available in the S&P 500, as well as ETFs and more.
- Buy fractional shares of expensive stocks: One of the biggest benefits of using Stockpile is the fact that you can invest in fractional shares. This makes it possible for beginning investors to buy into stocks that would otherwise be out of their reach.
- The option to convert to a regular gift card: Let’s say you buy a Stockpile gift card for a teen who immediately hates the gift and the idea. Stockpile will let the recipient transform the gift card into a regular gift card they can use at a traditional retailer.
Downsides of investing with Stockpile:
While there are plenty of advantages to gain from investing in fractional shares of stocks and giving stock as a gift, Stockpile isn’t perfect.
There are a few downsides to consider before you pursue this path:
- Fees for giving stock as a gift: Stockpile charges fairly high fees to give stock as a gift, and those fees add no value to the transaction other than helping the platform turn a profit. However, it is important to note that the fees for giving stock as a gift are paid by the giver and not the recipient.
- Fees for using credit or debit: Using credit or debit to fund your account could be seen as advantageous, but you’ll pay for the privilege.
- Big fees for leaving the platform: If you give a stock gift card to a young person and they decide to transfer their account to a different brokerage firm later in life, they'll have to pay a $75 transfer fee.
Who is Stockpile good for:
- Someone who wants to teach children in their lives about investing and doesn’t mind the fees for gift cards
- Anyone who wants to buy fractional shares of expensive stocks
- People who trade a lot and want to benefit from $.99 trades
Who should skip Stockpile:
- People who may benefit from a broader range of investment options
- Someone who invests a lot of money regularly, since Stockpile sets fairly low limits on the amounts of stock you can buy
At the end of the day, Stockpile’s low fees make it a fairly attractive option for anyone who wants to buy fractional shares of stocks.
However, this platform is really best for people who want to give stock as a gift.
For consumers who want to grow their wealth via a taxable investing account, there are better brokerage firms out there with more features and broader appeal.
Still, parents and family members who want to help children learn about investing may be giving the biggest gift of all.
Financial education is crucial for young people, as it could make a huge difference in how they think about investing and building wealth for the rest of their lives.
The next time you get ready to buy gifts for a birthday or the holidays, consider throwing a stock gift card in the mix.
Chances are good the concept will pique the young person’s interest at the very least.
Once they’re engaged, using the platform could teach them valuable lessons that last a lifetime.
In the worst-case scenario, they will convert their stock gift card to a traditional gift card and buy who-knows-what.
Maybe they want Nike shoes instead of Nike stock, and can you blame them?
When you open an account with Stockpile and give stock as a gift, you will at least know you tried to make a difference in a young person’s life.
Holly Johnson is a financial expert, award-winning writer, and Indiana mother of two who is obsessed with frugality, budgeting and travel. Her personal finance articles have been published in the U. S. News, Wall Street Journal, Fox Business, and Life Hacker. Holly is founder of of the family finance resource, ClubThrifty.com, and is the co-author of Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love. Learn more about Holly here.