Stash vs Acorns vs Robinhood vs Betterment vs Wealthfront

It is time for a mega-review session where we review Stash versus Acorns versus Robinhood versus Betterment, and Wealthfront.

Why these apps? These are current front runners in a crowded space that encourages small investments from regular people as a way to invest rather than the traditional broker models of investing. In a way, this Wealthfront review versus the other money investing apps begs for a new investing apps versus Fidelity, Schwab, ETrade, Ameritrade, ScottTrade review.

That will have to wait for another day since I’ve already bitten off more than I can likely chew with an in-depth look at each of the Stash, Acorns, Robinhood, Betterment, Wealthfront apps and financial services.

Stash vs Acorns vs Robinhood vs Betterment vs Wealthfront 1

The Quick and Dirty Look (No Fine Print)

Is Stash safe? What does Betterment do? Why is Wealthfront better or worse than Acorns? These questions demand an in-depth look at each one, and a thorough review of the fine print. Before that, we can take a look at what each money app and financial service say they do, and how that fits for regular investors.

What Is Stash?

Stash is why I’m writing this mega-review. People keep asking me about Stash. Then they ask me if Stash is better than Robinhood, then they want to know if Acorns is better than Stash, and then… well, you get the idea. These small investment apps and stock investing services keep popping up. Then, when they get to a certain size, they go out and offer more. Finding out who is the best Stash, Acorns, Robinhood, Betterment, or Wealthfront is a constantly changing battle.

Let’s jump right in and do the quick review of Stash.

The original purpose of Stash was to bring investing to small investors by offering fractional share investing. The idea is that if you want to invest in say, IBM stock, you have to come up with something close to $120 to buy one share. Even then, most brokerages are not designed for investors to buy only one share, even with no commission trades. Many brokerages also have a minimum balance requirement.

Enter Stash, a finance company happy to take just $5 or $10 and invest it into IBM stock anyway. If IBM trades for $100 and you invest $10, then you would own 1/10th of a share. There is no such thing as a fractional share, but if you pool enough money together, you can use accounting to basically fake the concept of owning one-tenth of a share, by crediting you one-tenth of the dividend, and so on. I’m working on a detailed, in-depth Stash review, but for now, here are the highlights from the marketing materials.

  • Stash offers fractional share investments in individual stocks or ETFs
    • Fractional shares are not new. Reinvesting dividends into a stock often causes fractional shares in ESSP and ESOP programs.
  • No real-time trading – all trades take place during four trading windows each day.
  • Stash has three plans
    • Stash Beginner costs $1 per month
    • Stash Growth costs $3 per month
    • Stash+ costs $9 per month
  • Stash is safe and is a registered investment advisor
  • Stash is legit banking – banking is offered through Green Dot Bank which is FDIC-insured
  • Stock-Back Card is a rewards card, but instead of points or cash back, you get more shares of stock
    • The Stock-Back card is a debit card, not a credit card
    • When you spend at certain companies, you get stock in those companies, so buy a Starbucks latte, get some Starbucks stock
    • Stock-Back Card is legit, but the earnings are tiny, just 0.125% for “everyday” purchases. That $20 latte run will only earn you 2.5 cents worth of Starbucks stock.
  • Stash offers IRA accounts with the higher level subscriptions
  • The biggest Stash problem that sticks out in my mind is what happens if you decide to leave Stash. Your fractional shares have to be liquidated since fractional shares are not “real” shares.

What Is Acorns?

All of these apps started with a gimmick and then moved on to be full-platform financial services offering everything.

Acorns started as a round-up your change and invest it app. The simple idea was that with every purchase you make, if you just rounded it up and took that change to invest, then you could painlessly invest pennies, dimes and quarters to grow into a future fortune. It wasn’t long ago that we took an in-depth look at Acorns. In that Acorns review we looked into whether Acorns is safe, legit, and worth it. Here’s the short-short version:

  • Acorns offers automatic investing by rounding up your change
  • Acorns also offers automatic monthly, or other time frame investing
  • Money is invested in Acorns investment portfolios of ETFs
  • Offers an Acorns debit card that aids in getting better rounding up investing
  • Costs $1 per month for Lite plan, $3 per month for Personal plan, and $5 per month for Family plan
  • Higher tier plans offer free checking account called Acorns Spend
  • Acorns offers IRA plans
  • Acorns is safe, Acorns is legit
  • Acorns has no minimum investment

What Is Robinhood?

Robinhood is the first commission free trading platform that I remember hitting the big time. Robinhood’s marketing gimmick is that you receive a free share of stock when you sign up. Unlike the auto-save Acorns, or the fractional shares Stash, Robinhood is about trading without commissions. A detailed review of Robinhood is also in the works.

Unlike Stash, Robinhood offers real-time trades priced at the market whenever you trade. Robinhood does offer fractional shares, again as an internal accounting item. Robinhood focuses on being a brokerage rather than being an auto-investing, or card-based rewards investing system.

  • Robinhood offers real-time trading
  • Robinhood offers fractional shares of stocks
  • Robinhood cash management account currently earns 0.30 APY.
  • There is a debit card from Sutton Bank that attaches to you Robinhood cash account
  • Robinhood is a broker-dealer and insured by SIPC.
  • Robinhood offers options trading. Compared to Acorns and Stash, only Robinhood offers options trading
  • Robinhood offers margin trading via its Gold tier
  • You can buy cryptocurrency like Bitcoin and Etherium from Robinhood as well.
  • Stopped customers from buying Gamestop and others during a short-squeeze that hurt one of its largest investors.

What Is Betterment?

Betterment is a robo-advisor. The point of Betterment is not trading or picking stocks, but rather the idea that the computer-aided professionals at Betterment will generate better returns for you than you would get by trading for yourself, or investing in mutual funds. You deposit money, they pick a portfolio and invest for you. The Betterment debit card is a cash back card that offers cash back from specific retailers when you use the debit card from Betterment. That cash goes into your investment account.

When looking at Acorns vs Betterment, or Betterment vs Stash, Betterment charges advisory fees as a percentage on the overall money you have invested instead of a monthly fee like Acorns and Stash do. Acorns and Betterment are similar in that they both invest in portfolios composed of ETFs rather than individual stocks.

  • Betterment offers an IRA including traditional, Roth and SEP IRAs.
  • Betterment uses deposits to rebalance your portfolios so you don’t have to buy and sell in order to rebalance
  • The Betterment high-yield cash account current offers a rate of 0.40% APY, which is slightly lower than the Marcus high-interest savings account
  • Betterment is safe with FDIC insurance for banking products, and SIPC for the investment platform
  • Betterment is legit
  • There is a Betterment checking account. Checking account is required to get the debit-card
  • There are no Betterment banks physically, all deposits and withdrawals must be made electronically
  • Regular investing fees are 0.25% per year on your invested balance
  • You can pay 0.40% per year for phone access to CFP professionals

What is Wealthfront?

Wealthfront is a robo-advisor like Betterment. Wealthfront offer additional automation in that it can take you deposits and then route them based on some rules you can setup. There is a detailed Wealthfront review here.

The Wealthfront high-interest checking account is good with a rate of 0.35%, which is little bit lower than the Betterment cash account, currently.

Wealthfront is like Betterment in that the basic account charges 0.25% per month on the invested balance as the fees. When it comes to Wealthfront versus Stash or Acorns, the latter two charge a monthly fee instead.

  • Wealthfront offers a personal loan as a Portfolio Line of Credit. It is a very low interest rate personal loan with rates between 2.50% and 3.75%.
  • Wealthfront offers Roth IRAs, regular IRAs, and SEP IRAs
  • Investments are made automatically into a portfolio of ETFs
  • Wealthfront account minimum is $500

What Is Public?

Public is a mini-broker similar to Robinhood. It was forced to stop offering Gamestop stock during the Reddit induced frenzy by its clearing house.

Better Than Mainstream Discount Brokers?

An increasing number of the features offered by the mini-brokers, or micro-brokers, are also being offered by more mainstream brokerages.

For example, both Fidelity and Schwab offer Stock Slices, which allow for fractional shares versus Robinhood and Stash offering similar abilities to invest any amount of money in a stock regardless of price. Fidelity and Schwab also both offer commission-free, or zero commission, trades on some stocks. When it comes to Fidelity versus Robinhood, or Schwab versus Stash, and the like the micro-brokers still offer lower, or zero, minimums versus higher minimums for the regular brokers. Investors who don’t want to pick their investments can use discount brokerage services like Fidelity Go to get a robo-advisor arrangement.

Best Micro-Broker

Trying to say whether Stash is the best, Robinhood is the best, or Acorns is the best is a bit of a fool’s errand. Each offers a different take on small investor service. Do your research, and also look at how the apps work, and really understand what is going to work and how they are going to take your money (checking account?), and invest your money (automatic or manual), and choose the one that is right for you.

Investors with more than a few thousand dollars might be better served at a mainstream discount broker, just for the ability to get someone on the phone when you need something. Investors with small amounts might fare better with the newer mini=brokerages that are aimed directly at them.