- Trade US stocks, shares and ETFs listed on the Nasdaq and Dow exchanges with no commission.
- Buy fractional shares, so you can build your position in stocks like Apple and Amazon over time.
Accessing the US sharemarket from outside the US can be fairly challenging, and so investments could be difficult to make. Fortunately, with trading apps such as Stake populating the app stores, trading and selling shares within US markets has never been easier.
With so many trading apps currently available, it can be problematic to know which one best suits your needs. Some charge zero trading or brokerage fees, while others charge for both trading and bank transfers, making it tough to make a decision. But one app that is currently extremely popular is the Stake investment app.
So, how does Stake hold up against its competitors and what can it offer you that other apps cannot?
The company behind Stake
Stake, a division of financial services company Sanlam Private Wealth Pty Ltd, was established in Australia in 2017 and has quickly become one of the largest stock trading applications providing non-US users access to United States sharemarkets. It has opened up its services to other countries, including New Zealand, the UK and Brazil.
Stake aims to bring innovative technology to the world of brokerage applications and seem to be doing fairly well in its journey to achieve this.
The Stake app is a share trading platform that gives Australians, and other users outside the US, access to US sharemarkets without the need for a United States trading account. With over 3,500 different stocks and Exchange Traded Funds (ETFs) available to trade, Stake account users are given everything they need to make investments in shares they have selected.
Users of the Stake app are given a choice of two different membership tiers. One is a free plan, and the other is a premium tier known as Stake Black. Your choice of membership is usually determined by your experience within the world of equity trading.
Double check what sign up bonuses are on offer before using a referral code. At one point Stake were offering USD $70 of Airbnb stock while various bloggers and publications were simultaneously promoting their standard sign up bonus — a share in GoPro, Dropbox, or Nike — two of which were valued significantly lower than Airbnb at the time of writing.
How Stake works
Stake works in the same way as the majority of other trading applications. It provides users with access to a large number of different stocks and shares, giving you the ability to invest in companies of your choice. If you are familiar with stock trading, then you will instantly be at home with the Stake trading application. But if you're a newcomer to this form of investment, the app has a detailed Support section to answer your questions and get you started.
The Stake app can be used either through a mobile device, or on any device that can access the internet. All users must be over the age of 18, which is par for the course when it comes to stock trading.
Unlike other trading applications, however, non-American users are given access to American stocks, without the need for a United States trading account. So whether you are based in Australia or another country where Stake operates, you have access to a wide of shares and ETFs.
The first step is to open up an account, which only takes a few minutes thanks to a straightforward registration process. However, since the application is restricted to users over the age of 18, you will need ID to prove your age. Make sure you have your ID at hand to speed up the sign-up process.
You will need to add money to your account through the Add Funds function either with a Bank Transfer or Online Banking Poli methods. But this again, will take at least 1-2 business day to process. Poli pay is 1 day faster and there's a USD $9.63 express transfer fee. Currently, you cannot use your credit card to fund your account.
The user interface is extremely easy to use but there is a little sting in the tail, there's a USD $17.50 FX fee.
Once all of this is taken care of, you are free to invest and trade in any stock you want.
In Australia, Stake is regulated by the Australian Securities and Investment Commission (ASIC). Its US brokerage partner, Drive Wealth, is regulated by FINRA (Financial Industry Regulatory Authority) and is a member of the SIPC (Securities Investor Protection Corporation).
Designed mainly for Australians, but...
Stake has recently launched in the UK, giving access to a US trading platform to UK residents too. However, Stake itself is based and regulated in Australia and is thus predominantly designed for Australian users.
Although Stake gives you access to a wide variety of trading platforms, users can only access and trade US stocks. This means anyone who is potentially wanting to use Stake as a global stock tool will have to look elsewhere.
Fortunately, US stock markets dominate the global equities scene, with NYSE and Nasdaq occupying first and second rankings in market value, with a combined value well in excess of the total of the next eight. Stake offers access to over 3,500 US shares and ETF's. Anyone interested in the US stock market, but struggling to access it from another country, will find the Stake app suited to them.
How much does it cost?
The big bonus of the Stake app is that you can trade within the US market, commission-free. Unlike a lot of its competitors, Stake doesn't charge fees when you make a trade using their app. This is ideal for small-time investors and anyone looking for fee-free stock access. Stake also has no account-keeping or custody fees, but there is a flat USD $2 charge for each withdrawal from your Stake account into your bank account.
Although the main app itself is free to use, you can opt into a USD $9 per month Stake Black plan to access the premier tier benefits, which include instant access to sales proceeds and stock analysis from experts. Pay a year's subscription and get a discounted rate of USD $90 (USD $7.50 per month).
There is a slight catch, however. Since Stake operates using US dollars, you will need to transfer any US dollars you have into your Stake account, or convert Aussie dollars into US dollars. Stake currently has a 0.7% fee to convert other currencies into US dollars, with a minimum conversion fee of USD $2. Stake's competitors also charge currency conversion fees, often higher than Stake's. Besides subscriptions for Stake Black, currency exchange is how they primarily generate revenue.
Pros and cons
- Gives users access to US shares markets without the need for a US trading account. This is ideal for residents outside of the US who want to trade in US shares.
- The easy-to-use interface is suited to investors of different experience levels. So, whether you are familiar with share trading or not, you will quickly get used to using this app.
- Zero commission and custody fees. This means you don't have to consider additional charges when making trades through Stake.
- Streamlined US tax compliance. Stake sign-up includes automatic submission of the US tax form required to avoid paying a higher rate of US tax on trading profits. A fee of USD $5 is payable for this service.
- Trade in fractional shares. You don't need to buy a whole share of expensive stocks like Amazon or Google. Stake lets you buy a fraction of a share.
- Free Nike, Dropbox or GoPro stock just for signing up. Stake offers new users free stock just for signing up.
- Accessible via both website and mobile app. This gives you the ability to trade on the go or from the comfort of your own home.
- Provides access to US sharemarkets only. If you are looking for an application that provides access to global shares, including Australian shares, you may want to look elsewhere.
- Currency conversion fee. You will be charged a 0.7% fee when converting AUD into USD for depositing into your Stake trading account.
- Slow settlement of funds. If you don't have the Stake Black account then you need to wait about 2 days for your funds to settle when you sell out of a position. Frustrating if you want to trade more quickly.
- Unavailable small caps. Some small cap stocks on the NASDAQ or NYSE might not be available to buy and sell on Stake. You'll have to request stocks be added.
- Customer Service may be limited. Both Trustpilot and ProductReview.com.au have comments about poor customer service at Stake.
Alternatives to Stake
There is a variety of different trading platforms and apps that fledgling stockbrokers can use. Although Stake is extremely useful, there are some other trader apps you may want to consider.
The closest alternative in terms of their offering is SelfWeath, an award winning Australian broker which now offers access to US markets (as well as shares listed on the ASX). However, unlike Stake, SelfWealth charges $9.50 per trade. Their fee is flat though, regardless of the size of the trade. While Stake does not charge a commission, they do charge a currency conversion fee when depositing USD into your account.
One such alternative is the eToro app, which calls itself a social trading platform. Established in 2007, eToro gives access to a variety of global markets to countries such as Australia and the UK. As it is a social trading app, it allows users to discuss their investments and work together to invest in shares they believe will pay off. On top of all this. eToro also offers zero commission fees, which is a bonus.
More recently, Superhero has emerged as a commission-free means of investing in stock. However, unlike Stake, Superhero is scoped to shares, Listed Investment Companies, REITs, and ETFs listed on the ASX. Therefore, Superhero can be seen as complimentary to Stake rather than a direct competitor: Superhero is to the ASX what Stake is to the US markets.
Another excellent alternative to Stake is Revolut, a fintech start-up offering users access to stock trading. Like Stake, it is free to use at the basic level. Perhaps one of the biggest bonuses of Revolut is that its users don't have to pay withdrawal or inactivity fees.
And lastly, for investors who want a much more hands-off approach to investing, there is Raiz. This app does roundups and invests your money in various funds on your behalf, meaning you may be invested in the US companies you could buy shares in with Stake. However, unlike Stake, there is no way to buy and sell specific shares.
Looking for more apps like Stake. Check out our list of Australia's best personal finance apps.