As a child, like clockwork, every birthday my grandfather would give me a Savings Bond along with whatever toy or video game was popular at the time. Those Savings Bonds came in handy when paying down college debt. Owning them and using them was all I needed to become hooked on investing and the power of compound interest.
The days of buying a Savings Bond or a Stock Certificate at a bank and signing it over to your grandchildren are long gone. These financial instruments have become electronic and the friction of gifting them has ironically increased since being modernized.
Stockpile is the first promising attempt at cutting down on the friction of gifting financial instruments.
Stockpile takes a clever and familiar gift card approach to stock gifting. They allow a user to use a credit card to purchase any amount of shares in stock, including partial shares, in gift card form for a gifting fee of $2.99 + 3%.
While using Stockpile I was pleasantly surprised how they handled gift card redemption.Unlike other gift cards that lock you down to narrow uses and attempt to charge fees, Stockpile provides many different options during redemption. You may redeem the gift card for the stock the gifter choose, regift the gift card, redeem for a stock of the redeemer’s choosing or you may purchase another gift card, such as a gift card to use at Macy’s.
Stockpile’s options of investments are impressive — hundreds of companies along with many ETF options. The website and iOS app are carefully designed with a modern look and seamless user experience.
OneShare.com, GiveAShare.com and FrameAStock.com provide a similar but limited stock gifting product. These products allow users to purchase one share (and only one share) at a time for a much higher fee than Stockpile (a share of SIRI trades for $4 and cost $44.00 on GiveAShare). These websites are in much need of a facelift and all three lack a mobile strategy.
Companies like GiveAShare focus on Adults who want to teach investing basics to children. They focus on getting young investors excited about investing by giving users a physical certificate (many times unofficial) and providing add-ons such as child investment books. Stockpile is not pursuing this educational or novelty route and do not provide physical certificates, Stockpile is more focused on providing a practical way of gifting a stock.
Stockpile is a well-designed, easy-to-use, innovative product that has made gifting stock more than a novelty. Stockpile has successfully removed the friction of gifting stock at a reasonable price. Through Stockpile, people can give the gift of wealth beyond the impersonal wad of cash. Proud grandparents, aunts and uncles can buy stocks that will teach the value of investing and set their loved ones up for the future. I like the fact that a small gift I give today could potentially grow much larger and make someone happier now and when they cash it in someday many years from now.