Purchasing individual stocks can be expensive and cumbersome, leading a lot of people to miss out on a great investment opportunity.
That’s where Stockpile comes in, making everything easy by allowing you to purchase fractional stocks and stock gift cards.
Let’s take a more in-depth look at Stockpile including how it works and the costs involved, so you can see if it provides the best solution for your investment needs.
Launched in 2010, Stockpile is an online brokerage service that allows you to purchase, sell, and gift fractional shares in more than a thousand stocks, exchange-traded funds (ETFs), and American depositary receipts (ADRs) through gift cards. The minimum purchase allowed is $5.
You must be a U.S. citizen or resident at least 18 years of age to open a Stockpile account. Minors are allowed to receive stock gift cards, but their parent or guardian will need to set up a custodial account for them.
If you are looking to introduce your children to the basics of investing, you will find Stockpile an invaluable tool.
What Stockpile Has to Offer
Stockpile offers a variety of products and services that set them apart from other brokerage service providers. Two of their primary services include fractional shares and stock gift cards.
Sometimes you may want to own shares in a specific company, but you can’t afford the extremely high price of the stock.
With Stockpile, you can purchase fractional shares to reduce the cost of your investment, allowing you to purchase whole shares slowly over time.
If a company’s stock is priced at $5,000, for example, you can decide to purchase a portion of the stock. If you pay $100 for the stock, you get 0.02 shares.
The value of that stock can grow from there or go down depending on the market dynamics. However, you won’t have much to lose if the market goes down because you’ve invested very little.
Stockpile Gift Cards
You can purchase Stockpile gift cards for a loved one, which they can then use to buy stocks in a wide range of well-known companies, including Google, Netflix, and Amazon. You have the option of purchasing the card either as a physical card or as an E-card.
If you opt to purchase the e-card, you can get it from the Stockpile website. You don’t need to sign up for an account to be able to make a purchase.
Just follow the steps below:
- Choose your preferred stock
- Choose the amount you want to spend
- Pay for your stock at the checkout window
Keep in mind the final price you’ll pay will include the cost of the card and the gifting fee. The gifting fee includes the trading fee and the credit/debit card fee. Once you pay the total amount at the checkout window, the recipient will get a card for the full amount you wanted to give them.
You can get physical Stockpile gift cards at various stores in the United States. The list of those stores can be found on the Stockpile website.
Stockpile products and services are priced quite competitively. To begin with, note that the buyer shoulders most of the cost to ensure the recipient receives the whole amount of the gift card. You will need to pay $2.99 to cover the purchase fee on first stock bought with the e-card.
Then there’s a 3 percent debit/credit card fee. That means if you are buying a $100 gift card, you’ll need to pay a total of $5.99 between the two fees. The higher the denomination of the gift card, the more you will pay in fees, thanks to the 3 percent charge.
If you choose to go with physical cards, you will have to dig deeper into your pocket. For a $100 gift card, for example, you’ll pay a $7.95 service fee, which is $1.96 more than what you would pay for an e-card of the same value.
Physical cards are available in three denominations:
- $25 – with $4.95 in fees
- $50 – with $6.95 in fees
- $100 – with $7.95 in fees
You may also have to pay for shipping of the physical cards. However, shipping is usually free if you purchase at least three gift cards.
The good thing about physical cards is that they normally have a greater positive impact compared to an e-card sent to someone via an email—there’s just something about holding a physical product that resonates more with recipients.
How To Redeem Stockpile Gift Cards
Purchasing Stockpile gift cards is simple and straightforward. However, redeeming them can be quite challenging. The recipient needs to be at least 18 years old and open a Stockpile brokerage account. If the recipient is a minor, a custodial account in the name of a parent or guardian is required.
It’s also mandatory for the recipient to be a U.S. citizen or resident. Fortunately, the recipient doesn’t have to purchase stock in the company specified on the gift card.
While that is an option, Stockpile gift cards are for the site itself rather than individual stocks, meaning any product on the site can be purchased with the gift card.
What if the recipient is not interested in purchasing any stock? Stockpile allows recipients to redeem gift cards for a gift to selected retail merchants. This is particularly helpful if the recipient isn’t in the US or is otherwise ineligible for a Stockpile account for any reason.
Stockpile Pros and Cons
Like any other investing app, Stockpile has its advantages and disadvantages. Let’s explore some of them so you can make a more informed decision on whether to use it or not.
- Stockpile offers one of the best and simplest ways to give the gift of stock.
- The ability to buy fractional shares is what drives Stockpile, thanks to the fact that most of the leading stocks are trading for much more than the $50 to $100 typical loaded on gift cards.
- The basic trading fee of $0.99 is one of the lowest you can get on the brokerage market today.
- Stockpile requires no minimum account balance. It allows a gift card recipient to open an account with no more than the cash value of their gift card.
- Stockpile charges no annual fees on its brokerage account.
- There’s no access to direct customer support through live chat or phone.
- Stockpile limits share purchases to the bigger name securities despite the fact that it offers over 100 RTFs and 1,000 stocks.
- If you are an active trader who would need an investment account, Stockpile may not be appropriate for you as it isn’t a full-service broker.
- You can’t access Stockpile if you are outside of the U.S.
- If anything goes wrong and Stockpile closes shop, your gift cards will become useless.
Stockpile was developed to enable people to gift small amounts of stocks and to introduce children and beginning investors to the basics of investing.
You may want to give your child stock on a special occasion, instead of toys, or build up your own portfolio on a low budget.
That’s where Stockpile comes in handy. It helps you give the gift of stock or allows you to purchase stock for yourself in affordable amounts using fractional shares.