Stockpile review: Give the gift of stock, even to kids


Adam Cecil

Adam Cecil

Former Staff Writer

Adam Cecil is a former staff writer for Policygenius, a digital insurance brokerage trying to make sense of insurance for consumers. He is a podcast producer, writer, and video maker based in Brooklyn, NY.

Published February 12, 2018|5 min read

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In the wide world of stock-trading apps, it can be hard to pick the app that’s best for you, especially if you’re new to the stock market. Stockpile gears itself toward newbie stock traders, but what really makes it stand out from the crowd are its features geared towards kids and a unique “gift card” option.

While you won’t find free trades like Robinhood, you do get a wealth of educational materials, the option to buy fractional shares, and the ability to easily create custodial accounts for minors. While I wouldn’t suggest it as my first choice for new adult investors, Stockpile is an excellent way to get kids and teens into the stock market.

What is Stockpile?

Stockpile is a stock- and ETF-trading app, similar to other online trading platforms like eTrade or Robinhood. Unlike many platforms, however, Stockpile allows you buy fractional shares. That means you can buy 0.05675 of an Apple share, as I did last week for $10. Stockpile charges $0.99 per trade.

Stockpile lets you buy gift cards for specific stocks or with cash to fund an account, something made possible by fractional shares. Another thing that makes Stockpile unique is that they offer easy-to-create custodial accounts for parents or other relatives looking to get kids interested in the stock market.

How do I buy a gift card from Stockpile?

You can buy a Stockpile gift card on their website for any amount up to $2,000. From there, you can e-mail the gift card, print a copy at home, or send a plastic gift card by mail. You can choose any of the over 1,000 stocks or ETFs that Stockpile offers on their platform, and Stockpile has plastic cards for popular stocks such as Facebook, Amazon, and Disney. You can also gift an amount that just goes into the recipients’ Stockpile fund.

Because Stockpile offers fractional shares, a gift card recipient can use all of the money on the card immediately. You don’t have to have an account to buy a Stockpile gift card, but you do have to open an account to redeem the gift card.

Note that Stockpile charges an extra $4.95 on top of the face value of the card to cover credit card processing fees, the trade fee, and the cost of printing the plastic card. Online gifts cost an extra $2.99 for the first stock and $0.99 for each additional stock, plus 3%. That’s the price of convenience.

Are gift cards easy to redeem?

Once the recipient has an account set up, redeeming a gift card is as easy as typing in the short code on gift card. Setting up an account is about as simple as opening a bank account, and can be done entirely through the app on your phone.

I only ran into one issue while setting my account. After the Equifax hack last year, I froze all of my credit. Stockpile was unable to verify my identity through my Social Security number, and I had to send them a picture of my driver’s license to prove I was real. They took over a week to verify I existed. Overall, an understandable speed bump, but be aware of it if you also froze your credit last year.

Can I give stocks to my kids?

Yes, but the asset will go into what’s called a custodial account. You’ll be in charge of the account until the child reaches the “age of majority,” which can vary from state to state but is usually 18. Opening a custodial account with Stockpile will require you to have the personal data of the minor on hand, similar to opening an account for yourself.

All of the assets legally belong to the child, and you’re not allowed to take any of the assets or funds out of the account. The minor will owe taxes on any realized gains, but since they’re taxed at the child’s rates, there are usually major tax advantages to having the assets in a custodial account.

Once kids are on their own with the app, Stockpile offers a few tools that help them navigate what can be a complicated landscape. There are several short guides to the stock market built into the app, and kids can go through these on their own to learn the basics and more. They can also easily keep track of their account’s performance through the app, and make their own buying and selling decisions. Note that all of a minor’s trading activity has to be approved by the account’s custodian.

Is Stockpile worth using as an adult?

While Stockpile offers unique features for getting children interested in investing, I cannot honestly recommend this app for adults, even first-time investors.

Stockpile is very similar to Stash, an app geared towards first-time investors that I reviewed last year. Stash also allows you to buy fractional shares, but instead of charging you per trade, they charge you a flat $1 per month. Depending on how you want to invest, Stash may be a better option for you, since you can make multiple trades per month for the cost of just one trade on Stockpile. However, Stash charges $1 every month even if you don’t make a trade, making it potentially more expensive in the long run.

Both apps are more expensive than Robinhood, which allows you to purchase stocks and ETFs for free. Robinhood doesn’t have fractional shares, but unless you’re married to the idea of owning 0.05% of an Apple share, it’s the best deal of the bunch. (Robinhood is also adding free cryptocurrency trading, if you truly want to throw your money away.)

Robinhood does not have any educational materials in the app – a pretty big oversight for a company that says its focused on first-time investors – but for the price of ten months of Stash or ten trades on Stockpile, you can buy a decent investing guide on Amazon.

A big reason to avoid all three of these apps is that they don’t offer retirement accounts. If you want to be financially prudent, you shouldn’t really put any money in a brokerage account until you’ve maxed out all of your available retirement options. Robinhood says they’re adding IRAs in the future, but then spend development time and energy on a flashy feature like crypto trading instead of something that, you know, actually helps first-time investors.

At the end of the day, many adults are better off with a service like Betterment or Wealthfront that offers low-cost robo-investing. Stockpile is best used as an educational toy for kids, and luckily, it does an excellent job at that.

Image: Nikada