By now most people are familiar with savings apps, many of which help customers save by rounding up purchases or use checking account data to sweep money into a different account for a future planned use. While this type of forced savings is a great feature for consumers the reality is that it is just one aspect of personal finance.
Today, Stash a growing financial platform announced a new feature which tackles another hurdle consumers face: investing. The feature is called Stock-Back, and it is the first rewards program of its kind to help consumers invest when they make purchases. Before we get into the details of the new offering, it is worth mentioning that the launch of Stock-Back is part of a wider announcement of Stash’s mobile-first banking services platform which is made possible through partnership with Green Dot Bank. Stash offers an FDIC-insured bank account and debit card combo which offers zero overdraft fees, no monthly debit maintenance fees and free in-network ATMs.
The announcement of Stock-Back is on the heels of their recently announced Series E fundraising round which totaled $65 million. The feature allows customers to earn rewards of shares of stock while they spend money at various public companies. For instance, making purchases at companies like Chipotle, Amazon or Walmart will earn fractional shares of the respective public company which are then held in an investment account. For companies which are not public, rewards will be invested in a Stash-approved ETF.
If you’re familiar with rewards credit cards that offer rewards points based on purchases, this program works in a similar fashion. The press release noted that the program will quickly ramp up in rewards when layered with exclusive offers and partner deals, which may increase Stock-Back up to 5%, but at launch customers receive a base reward of 0.125% for every qualifying purchase. It’s worth noting that rewards programs are typically reserved for credit cards as opposed to debit cards so this offering is unique for many reasons.
The investment account costs $1 per month, but once a user has an account balance of $5,000 or more, the cost is 0.25% of the balance. This assets under management fee is pretty competitive with many of the other offerings that exist in the market today.
What I love about this new feature is that it builds on what other companies have done with savings and is a stepping stone for Americans to further their understanding of personal finance. Understanding how investing works is an important step of everyone’s financial journey and anything to further this is a great cause. Stash is truly looking out for the future financial well being of their customers with this new feature.
As mentioned above, Stash’s progress would not have been possible without the bank partnership with Green Dot. This bank partnership will be featured at LendIt Fintech USA 2019 which is less than a month away. The keynote session will feature Steven Streit, CEO of Green Dot and Brandon Krieg, CEO of STASH who will discuss digital banking for the masses.