Should you trade the US markets with Stake?

By   |   Verified by David Boyd   |   Updated 23rd July 2021

Stake NZ review
  • Buy and sell over 4,500 stocks and ETFs in the active US market.
  • Low-cost trading platform with no transaction or brokerage fees.
  • Stake’s premium subscription Black service provides advanced portfolio and account management tools.

Stake gives customers access to invest directly in the US stock market offering over 4,500 US stocks and ETFs. Popular in Australia, Stake was founded by Matt Leibowitz to provide access to low-cost trading in the world’s most active stock market. Stake is currently available for those in Australia, New Zealand, UK, and Brazil, with some US citizens also eligible to sign up providing they meet eligibility criteria.

Ready to see how Stake compares against competing trading platforms in New Zealand?

Stake

On Stake's website

Brokerage Fee

$0.00

Tradable Assets

ETFs, Shares

Tradable Indices

NASDAQ, NYSE

Signup Bonus

Get a free share worth up to $150 USD.

Highlights

  • Join Stake to get a free share worth up to $150 USD.
  • Make trades in seconds on over 3,800 US Stocks and ETFs.
  • Clear, simple and better pricing with no hidden fees.

Who owns them and are they safe?

Stake prioritizes the safety of their users. Stake never holds or touches your money, instead sending it directly to their FX partner and then onto DriveWealth.

DriveWealth, LLC is a US broker-dealer registered with FINRA, a US regulator. Drivewealth is also a member of SIPC, which provides protection up to $500,000 (including $250,000 for claims for cash) against fraud, even for non-US citizens. DriveWealth and the custodian (Citibank) will help to establish access for customers if anything happens to Stake.

For security, they provide MFA (multi factor authentication), data encryption, and data storage through AWS (Amazon Web Services).

How Stake works

To use Stake, you must provide personal information to set up an account. You can then trade using their app or website. Australian and NZ clients can open an account on Stake's website. UK customers are requested to download the Stake App on their mobiles first. The process is quite simple and should only take a few minutes.

What can you trade with Stake?

With Stake you can trade over 4,500 US stocks and ETFs. All of these shares are listed on US exchanges such as the NYSE and NASDAQ.

You can also access more than 200 ADRs (American Depository Receipts) of global companies that trade in the US market.

How are dividends handled?

Dividends in an amount proportional to your shares are paid directly into your Stake brokerage account approximately 2 to 3 trading days after the payment date.

In the US, there is a 30% withholding tax on dividend payments. This will be reduced to 15% if a W8 form is completed, which Stake can help with. At the moment, Stake does not provide an automatic dividend reinvestment program.

Fees

Stake has some fees to consider which we have listed below.

Brokerage fees

There are no brokerage fees, no trading fees, and no fees for buying or selling whole or fractional shares, including limit or stop loss orders. However, the US exchanges charge mandatory fees for sales, including an SEC Fee on all sales of $0.231 per $10,000 of sales proceeds, rounded to the nearest cent and a FINRA TAF Fee on sales of $0.000119 per share (maximum of $5.95), rounded to the nearest cent.

Transfer fees

Foreign currency deposits and withdrawals are charged an FX conversion fee of 1% and an additional 0.5% for express withdrawal.

Withdrawal fees

Withdrawals have a $2 bank processing fee. You can pay extra for fast / express funding which means you can get your money by the next trading session for an additional fee of $2 or more.

Stake Black subscription

You also have the option of paying $9 per month for their premium Stake Black plan. This is a subscription service that gives you access to analyst ratings, price targets, superior enhancements, pro-Level data and instant buying power. A breakdown of these elements can be found on the Stake website.

Pros & cons

Pros

  • Access to a large variety of US stocks, ETFs, and ADRs.
  • Low minimum account balance and commission-free trading on US stocks and ETFs.
  • Transparent fee structure.
  • Stake helps you manage US tax liabilities from your brokerage account.
  • Premium Stake Black option for large account balances or frequent traders.
  • SIPC protection on your account.
  • One free share worth up to $US150 including Nike, Dropbox, GoPro or a mystery stock when funding your account within 24 hours of opening.

Cons

  • Fee to deposit and withdraw money.
  • Low customer service ratings.
  • Limited educational resources for beginner investors.

Alternatives

Other alternatives to Stake include Sharesies and Hatch Invest. Sharesies is aimed towards beginner investors and you can have your own account from the age of 16. Hatch Invest is perhaps the closest to Stake in terms of tradable markets and fees.

Comparisons

Quick side-by-side comparisons of Stake against their competitors.

Stake

On Stake's website

Brokerage Fee

$0.00

Tradable Assets

ETFs, Shares

Tradable Indices

NASDAQ, NYSE

Signup Bonus

Get a free share worth up to $150 USD.

Highlights

  • Join Stake to get a free share worth up to $150 USD.
  • Make trades in seconds on over 3,800 US Stocks and ETFs.
  • Clear, simple and better pricing with no hidden fees.

FAQs

Can I transfer shares to Stake from another broker?

You can transfer shares to Stake from another broker. Transferring your shares to Stake is simple and takes about 5 minutes. You need to select the broker on the Stake website that you want to transfer shares out of.

How old do you need to be to sign up for Stake?

You need to be 18 to join.

How do I deposit funds into my account?

When you fund your account, you can choose the speed that you want the funds to reach your account, however you have to pay for express speed. There are different options around depositing money into your Stake account. You can deposit money into your account via:

  • Bank transfer.
  • POLi.

What is the minimum deposit required?

The minimum amount you can fund is $50 NZD.

How long does it take to withdraw funds?

Speed. It normally takes approximately 4 business days for a withdrawal to arrive in your local bank account.

How does Stake make money?

Stake makes its money from the foreign exchange fee charged when funding your account, interest earned on cash in US brokerage accounts, and subscription fees from customers who have signed up to the Stake Black premium service.

Verdict

Stake’s user-friendly experience and zero-fee business model makes investing in the US accessible to everyone. Partnered with DriveWealth, a US brokerage, and Citibank for custodial services, Stake provides a safe and secure way to access the US markets online. With limited access to live support or educational resources, Stake provides a secure platform for trading for those who are comfortable with an online only service and ready to learn investing independently.