What Is Stockpile?

Published on: Feb 20, 2017

Stockpile is an online stock service that allows average people – kids are encouraged, too – to buy fractions of expensive stocks instead of one full share. The company makes these investments easy through stock gift cards and a user-friendly app.

Stockpile CEO Avi Lele got the idea for the service a few Christmases ago when he tried to give stock to his nieces and nephews. The task was pretty much impossible because single shares of big companies like Amazon and Apple were too expensive.

So, Lele and co-founder Sanj Kulkarni created a stock brokerage (company who sells stocks) where customers could by fractions of stocks. If prices on a single share go up $10 in a year and a Stockpile customer owns 25% of a share, they get 25% of that price increase: $2.50.

“Basically, our mission is to make the stock market easy and affordable and accessible,” Stockpile CCO Dan Schatt told us. “You can’t really do anything with $50 in your wallet at a traditional broker. It would cost you probably a couple of thousand of dollars to get started.”

This new idea was even more novel because Stockpile focused on making stocks accessible to kids, an idea that was still in its infancy when, in 2010, Stockpile started filing paperwork to become a company.

As time went on, kid investors became popular because, as Steve Rosen pointed out in a 2017 Chicago Tribune article, young people who learn about investing tend to do it throughout their life.

We think it’s a great idea to educate your kids about finances and investing, but is Stockpile the right solution for helping them understand the world of stocks?

To get a better sense of the answer to that question, we researched how the company works and what other people are saying about it. What we discovered is split up into three sections in this review:

  • How Stockpile Works
  • Stockpile Fees and Other Considerations
  • How Kids Invest Through Stockpile
  • What Other People are Saying About Stockpile

Once we work through each of these areas, we’ll give you our final thoughts about Stockpile.

A Quick Word About Fractional Stocks

As we mentioned earlier, one of Stockpile’s perks is that you don’t have to buy full shares in a company. Rather, you can buy a portion of stock and earn portions of dividends.

Dan Schatt told us this works via a pretty simple process. Each day, Stockpile customers place orders for stock. At the end of the day, Stockpile gathers up all the orders and then buys stock to cover those orders.

Fractional stocks have been around for a while, Dan said, but it never made much sense for big firms to sell them because they usually dealt with clients who had tons of money to spend on stocks and the fees that firms charge.

Since Stockpile is brining on clients who are giving $25, $50 or $100 gift cards, fractional stocks are necessary.

How Stockpile Works

You have two ways of buying stock through Stockpile: purchasing a gift card for someone or selecting stock yourself.

Stockpile Gift Cards for Someone Else

The process of purchasing a Stockpile gift card for someone else is pretty easy.

Go to their website and click on the “Shop Now” button. A menu drops down and you can choose to buy an e-card or a physical gift card.

Stocks are Divided into Categories

Once you click on the link you want, you’re taken to the Stockpile marketplace. Stocks are divided up into categories like “Kids”, “Trending” and “Fashion”.

When you choose your category, you’re presented with all sorts of familiar brand logos and, underneath, the parent company who owns the brand.

For example, when you click on “Kids”, you get dozens of various brands. One of those brands is Barbie, and underneath the Barbie logo, Stockpile lists the parent company, Mattel.

Pro tip: You can buy ETFs, too, which are collections of different types of investments (currency, commodities, stocks) made into one stock.

It’s Fun to Buy Stock from Companies You Know

We like the way Stockpile organizes their stocks and ETFs because we think it’s a great way for investors young and old to put their money toward companies they like.

“A lot of people gravitate to our brokerage because they can connect with the brands they know and love and understand who the parent companies are,” Dan told us. “Buying what you understand and know is something our customers are excited about.”

Once you find the company you want, you click on it and choose the amount of the stock’s gift card you want to buy.

Gift Cards Can Be Used for Stock or Retail Cards

Dan told us the gift card you choose, even though it’s intended for a particular company’s stock, is basically a cash card you can use on the Stockpile site. That means you can redeem it for the stock on the card, other stock on Stockpile or a retail gift card.

The big advantage here, Dan said, is that you have flexibility. If your kid isn’t interested in buying a quarter-share of Apple stock, they can redeem the card’s amount for a Best Buy gift card.

You can also buy Stockpile gift cards in retail stores around the country. We used the company’s store locator to figure out where we could by some gift cards in Seattle. One hundred different Safeway and Kroger locations sold the cards.

Pro tip: You don’t have to have a brokerage account with Stockpile in order to buy someone a gift card.

Buying Stock for Yourself Through Stockpile

If you aren’t in the giving mood and you want to buy stock for yourself, you have the ability to do that through Stockpile’s website.

You’ll have to open an account with Stockpile – the industry lingo for this is “brokerage account”, which means the account you use to buy stock. Buying actual stock happens two ways:

  • Pick stock, buy it and open an account with a linked bank acct.
  • Open an account, link bank acct. & buy stock

According to Stockpile’s FAQ section, if you place your orders before 3 p.m. EST, you’ll have the stock in your account by the end of the day.

How Kids Invest Through Stockpile

The thought of helping kids invest in the stock of companies they love is a great idea, but how does it work, exactly?

“We actually allow kids to have their own log in, and they can request a trade as long as they have their parent’s permission,” he said. “Kids get to track their stocks and it gives them an opportunity to get their toe in the water at a very low price.”

These accounts are what’s known as custodial accounts – the kids own the stock but the parent opens the account and is responsible for it until the child turns 18.

When the child wants to make a trade either for stock or to exchange their stock gift card for a retail gift card, a notification is sent to the parents, who then decide if they’ll approve or deny the trade.

Stockpile Fees and Other Considerations

Stockpile’s fee structure is pretty simple. They have sets of fees for buying and selling stock.

Fees for Buying a Stockpile Gift Card

When you purchase a gift card, you’re paying all the fees associated with the card so that the recipient doesn’t have to.

Stockpile will charge you $2.99 for the card, as well as a 3% fee of the value of the card. So, if you buy a $50 card for Apple stock, you’ll be charged $2.99 and $1.50 (3% of $50) for a total of $4.49.

Some might argue that paying almost $5 for $50 worth of stock is too much, but we’ll get to that in a minute.

Fees for Making Trades on Stockpile

Any time you buy or sell a stock for yourself on Stockpile, you’ll pay $0.99 per transaction. That fee is really low compared to what you’d pay a big brokerage firm or a financial advisor, and, in that sense, Stockpile is making trading affordable for everyone.

They aren’t the only app/website offering low-fee stock trades, though. Robinhood lets you trade stock for free. However, the site doesn’t allow minors to trade stocks, something that sets Stockpile apart.

Insurance on Your Purchases

All stocks held by Stockpile customers are protected by something called SIPC, which is an acronym that means: Security Investors Protection Corporation.

SIPC-insured stocks mean that, if Stockpile goes under and the company disappears, SIPC will reimburse you up to $500,000 for the stock you owned.

Why will they reimburse you for stock you lost? Because Stockpile is a member of the SIPC. This is an important designation that adds to the company’s credibility.

What Are Other People Saying About Stockpile?

The reviews of Stockpile have been pretty positive and impressive, as heavy-hitting sites praise the company for making the world of investing accessible to people under 18 years old.

A 2015 article from Consumer Reports noted that merging stock and gift cards was a great idea, and that it could have an impact on kids if they actually caught on during the holidays.

“But if the marriage of gift cards and stocks catches on, this could be a novel way for kids to start investing,” reporter Chris Horymski wrote. “It wouldn’t be bad for the online brokerage firm, Stockpile, either, which is behind the stock gift cards. The company could end up with some new, long-term customers.”

On the other hand, Seeking Alpha’s Reuben Gregg Brewer said you should avoid Stockpile's gift cards.. His main criticism is the cost of buying a card for someone. When you’re paying a nearly 10% total fee for a $50 worth of stock, it’s just not worth it, he said.

“That's a huge cost, particularly when some brokers are willing to give away free trades for new business,” Brewer wrote. “True, you might need more than $25 to open an account for Junior and there are likely to be more headaches involved in the process, but I'd be loath to pay what amounts to a trading commission of that scale for anything.”

In our opinion, this criticism is pretty harsh. While brokerage firms may offer free trades in order to get business, the business they want doesn’t include under-18 investors.

They’re looking for established – or at least wealthy – individuals who have thousands to spend on their investments.

Also, as Brewer goes on to point out, a 10% fee is what you can expect when you buy a gift card from a grocery store, so Stockpile’s gift-card fees aren’t unusual.

However, Stockpile’s gift cards can buy stocks that gain value over time. Gift cards for stores lose value over time as the dollar amount on the card stays the same as inflation rises and cost of goods increase.

Our Final Thoughts About Stockpile

Stockpile is an innovative product because it allows parents to teach their kids about investing through hands-on trading.

The stock comes in a form of currency (gift card) that kids understand. Cashing in the card is as simple as typing in a code and setting up an account.

Easy for Kids to Use

The way Stockpile chose to organize their stock by categories is also pretty cool. Kids can literally shop for stock just like they’d shop for something on Target’s website. Identifying brands they like helps them choose what they want to buy.

In our opinion, this methodology is pretty amazing. It seems to be working, too. As we mentioned earlier, 25% of Stockpile’s customers are under 18.

Easy for Adults to Use

Stockpile’s kid-friendly user experience also benefits adults who are new to investing. But it’s not just about making stock choices easy.

The ease with which you can set up a brokerage account and buy stock is a low barrier that most adults can hop over without any problems.

If you’re a more advanced investor, you may not like Stockpile because stock choices are limited. You might want to check out Robinhood, as you’ll have more of a choice of stocks and trades are free.

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38 Consumer Reviews for Stockpile

Average Consumer Rating: 2.2
Rating Snapshot:
5 star: 8 4 star: 2 3 star: 2 2 star: 3 1 star:  23
Bottom Line: 26% would recommend it to a friend
Showing 1-11 of 38
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  • Bad service, screwed up my money transfer charging me unnecessary charges

    I had sold $31.38 worth of stock because I needed the money. It has taken a week to email me that the bank rejected ACH to my bank because they couldn’t find the account. Then when I try to resolve the issue, they keep giving me the runaround. I called only once to talk to a human and they stopped responding to my emails to resolve account the issue. I told them I’m turning them into the Trade Commission for not responding to my concerns and I got one response since then. No phone number to call, it’s a recording. The worse day of my life. As soon as I resolve this I am deleting my account, never to deal with them again.

    Bottom Line: No, I would not recommend this to a friend

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  • Need my money released!

    I thought Stockpile was great, until I need to sell some and have the money transferred. I needed the money before leaving on a trip and sold the shares in plenty of time. Well, I'm heading home tomorrow, and my funds are still in some limbo being held by Stockpile. When I contacted customer support, I was given links to articles. I can't find a phone number anywhere. And I have no idea if or when my money will ever be released to me.

    Bottom Line: No, I would not recommend this to a friend

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  • Love it!

    • Texas,
    • Apr 21, 2018
    • Verified Reviewer

    Great concept. I love all the tips and free education they try to provide! I own stock, and that’s cool!

    Thanks Stockpile!

    Bottom Line: Yes, I would recommend this to a friend

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  • 1 out 2 people found this review helpful

    Its so easy, LOVE this company and app!

    • Apr 18, 2018
    • Verified Reviewer

    I was scared to start investing and risking a lot of money. I was put at ease when I contacted Stockpile via email and got a response within minutes. I've never had to call them, I never had an issue linking my bank. I set up an account for my son, and he is so excited to own a piece of Disney and Google, he tells everyone. It's so cute.

    Maybe I am different than most people, and I read FAQ before jumping into anything. I don't just throw my money around and get mad because I don't understand the process. READ FAQ and other information before you do anything. Reviews aren't always true, and some people just blame other people for their mistakes.

    Bottom Line: Yes, I would recommend this to a friend

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  • 8 out 9 people found this review helpful

    Don't use this app

    • Boston, MA,
    • Mar 28, 2018
    • Verified Reviewer

    Like all the other reviews, this app, if you call the number, will give you an auto message that then hangs up on you. You email them, and you won't hear back from them. I try canceling an order but somehow got a gift card for the same stock I try to purchase. I don't know if you call this shady or whatnot, but it's pretty shady, so I am trying to find out with my bank whether or not I can get this transaction reverse because this isn't cool. Anyways, the bottom line is I would NOT RECOMMEND anyone who wants to try and get into stocks with this app.

    Bottom Line: No, I would not recommend this to a friend

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    Comments (2)
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    • Apr 3, 2018

      Russell

      The same thing happened to me, I attempted to cancel the stock, and they gave me a gift card to redeem the stock. Then I did, and tried to sell the stock and put it back in my bank, but they put my account negative. Scam!

    • Apr 12, 2018

      Sophie

      I've had a great experience with Stockpile, but purchasing with your credit card is a higher fee, however, it makes it easier, especially if you go with other brokerage firms, they only deal with cash. If you read all of the FAQ, you won't feel cheated.

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  • 3 out 3 people found this review helpful

    Newbie

    First time investing in stocks. I have mutual funds, but no individual stock. I first saw Stockpile gift cards and considered giving them as Christmas gifts but read reviews and changed my mind. My first purchase instead was through Groupon. I purchased a $10 Groupon for $20.00 of stock. So far I'm happy with Stockpile because just by virtue of the deal I'm up. I bought $150.00 more (Amazon). I am admittedly nervous about reviews I'm reading about the inability to get in contact with them and getting your money out. Right now I'm going to give it a tentative thumbs up.

    Bottom Line: Yes, I would recommend this to a friend

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  • 3 out 4 people found this review helpful

    Love it!

    • San Diego, CA,
    • Mar 19, 2018
    • Verified Reviewer

    The app is really easy to use and navigate. I opened two custodian accounts for my kids and put in some dollars to see how it works. At first, I was very scared after reading all the prior reviews and the problems transferring money, but I did not have any issues adding my bank account or receiving the funds after my first sale. I'm very happy with it.

    Bottom Line: Yes, I would recommend this to a friend

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  • 3 out 6 people found this review helpful

    Great concept, everything works fine!

    • Bakersfield, CA,
    • Mar 17, 2018
    • Verified Reviewer

    I don't understand how people have difficulty with Stockpile. As one reviewer put, it's not for trading. Just invest your money and let it grow. The benefits are 99 cents per trade and the fractional shares. I don't have a lot of money to invest, but when I get an extra $50, I buy a share on Stockpile. It's very easy. Transfers are free with bank accounts in 3 days and there's plenty of stock or ETF choices.

    Anybody who thinks someone needs to answer with a live person their every beck and call is not realistic. Stockpile's fees are low so people can invest, they don't collect a bunch of admin costs for some big customer service presence. People, realize what they offer and don't force them to be a full-service brokerage.

    Bottom Line: Yes, I would recommend this to a friend

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  • 5 out 10 people found this review helpful
    Updated review

    Rough start but everything worked out.

    Was a little rough getting started, but everything seems to be working out.

    Bottom Line: No, I would not recommend this to a friend

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    • Previous review
    • Mar 10, 2018

    Stockpile kept all of my money and locked me out of my account.

    I opened up an account in December 2017 after I downloaded the app on my iPhone. I thought this was a great way to invest money in fractional shares only $0.99 per trade. I bought Amazon, Google, and many other stocks that were over $1000.00 per share. After accumulating about $ 4300, I decided to sell my positions and requested a wire transfer to my bank account. I was advised this could take up to 6 days. After waiting 10 days I never received my money.

    I tried to call them and keep getting a message that all lines are extremely busy and I should email them at support. The recording then hangs up on you and you can't leave a message. They don't respond to my emails and shut down my account. I am unable to gain access to my money. I can't even print out my end of year tax documents or any of my trade confirmations. This has turned into a real legal mess! Please stay away from this company.

    (read moreread less...)

  • 18 out 19 people found this review helpful

    Things I wish I knew before becoming a Stockpile customer

    It took about three weeks total for Stockpile to transfer my money to Fidelity after I initiated the transfer. Getting the transfer through was a drawn-out nightmare.

    Things to know:

    1. When you call them, you will get a recording saying they have high call volumes and it will tell you to email them and then it will hang up on you.

    2. Most of my emails were not responded to UNLESS it was about purchasing stock.

    3. When trying to transfer my stock funds to Fidelity, the money did not move. It kept sitting in Stockpile but not earning anything, saying: "money unavailable."

    4. When I tried to get help with this non-moving transfer, they did not respond to my chat or emails until I resorted to putting things like "DISTRESSED." and "PLEASE HELP ME." in the headers.

    5. When I eventually got a manager, he told me because I had bought stock with a credit card it would delay the transfer because I would have to pass a review by the "fraud dept." He asked me to send copies of my credit cards, social security card, and driver's license. I did. The money still did not transfer. NOTE: They did not contact me to say: 'We see you want to transfer, so we need to collect data from you for a fraud investigation...' Instead, they just let my funds SIT, not earning and not transferring.

    6. I finally succeeded in getting the manager on the phone again and he said: "You never sent us the info (CCs, SS# DL)." I forwarded him the email I sent it in the week prior. He said, "That's strange, for some reason we missed this and we can't open it." So I uploaded it by a different method while he was on the phone with me. Fifteen minutes later, the manager emailed me saying, "Transfer approved" and he put in his note, "See, once we got the documents we moved on [my transfer] in 15 minutes. Your transfer will go through in 2-3 business days." I thought my nightmare was soon to be over, but NOPE. Four days later, the funds had not budged. I checked with Fidelity, and they saw no transfers pending.

    7. So I go through it AGAIN, begging with email and delayed chat for the manager to call me or email me about the matter. He does NOT. However, he DID change the initiation date of the fund's transfer to THAT day's date, erasing my ability to see the real day the transfer was initiated, not cool in my book, but oh well.

    8. The funds were then transferred to Fidelity the NEXT day, so that 2-3 business day thing seems like it's that long if they want it to be that long. Maybe he rushed it through because of the delays I had been through...only he knows.

    If it is Stockpile's policy to put people who pay with a credit card through the fraud department when they transfer/sell, then I wish they would say that on their website so customers can decide if they want to go through that "fraud department." I think that manager was my "fraud department" with a 15-minute turnaround.

    I personally was distressed about the inability to speak with someone about my money and at the slow and irregular pace at which this company executes transactions. This is why I wanted to move my money to Fidelity.

    To anyone stuck in a Stockpile nightmare, I have felt your pain. Just stay on it via email and delayed chat each and every day until you can get your money to wherever feels safe and reputable to you.

    In closing, do I think Stockpile is trying to steal people's money? No...but there were days I worried about that. Do I think Stockpile cares about giving you decent service when you are trying to leave Stockpile? No. I have never experienced anything like this from a business. The manager DID call me on two separate occasions. He was condescending at times. To be fair, I was terrified about getting my money, and he did not empathize too well with that.

    On the positive, I'm sure he is the one person who EVENTUALLY got my money to Fidelity. For that, I thank him.

    Bottom Line: No, I would not recommend this to a friend

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  • 7 out 15 people found this review helpful

    Why are people so dumb

    I've been using Stockpile since they started up. Are you people trying to say trade with Stockpile? If you are, you are dumb. You can't, simple as that. I have over 10 thousand in Stockpile and they have never stolen money from me, EVER! I can also get them on the phone every time. Are some of you guys trying to give a false testimonial? I would suggest Stockpile for long-term investment, no day trading!

    Bottom Line: Yes, I would recommend this to a friend

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