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Buy us stocks in Australia with Stake: Review

My Stake Review: How to buy US Stocks in Aus (cheaply) with the Stake App

Table of Contents

Are you keen to start investing in US stocks?

You know, those big names you hear on the news like TSLA, Apple, Microsoft, Netflix, Google or even Disney.

Five years ago it would take a bit of money and a lot of paperwork.

These days, not so much.

The Stake App is the way you can invest in the US markets, both affordably and conveniently.

It's what you call an online broker, but they have a couple of cool features that make it different to what you might expect from a broker.

I’ve been using Stake since 2018 and will show you how it all works and what you need to before you start. It’s not that complicated, and I’ll explain it all right here in this Stake review. 

But first… get your free stock

Looking for a stake referral code?

Join Stake for Free today using the referral code carlye366 and we can both get a free stock of either Nike, GoPro or Dropbox.

Yeah, its true – get a GoPro stock (valued around $9 USD), Dropbox stock ($30) OR Nike ($162) just by opening your account and putting some money in.

You’ve got to fund your account with 24 hours to claim this stock, and the minimum transfer in is $50.

After that, you get to spin the wheel (on the Stake app) and see which stock you get. Pretty fun.

What to know when you want to buy US stocks in Australia

While the concept of buying, holding, and selling shares is the same in the US as it is in Aus, there are some things you'll experience that are a bit different. It’s important to have a little understanding for when you start so there is no knowledge gap to ruin your motivation.

You are trading as a foreigner.

As an Australian in Australia trading on the ASX you are keeping everything local. This means you fit into the same tax system and structure that the companies you are investing in do.

When you use a platform like Stake (or another broker to buy US shares) you are required to be compliant with US tax laws. You will need to fill out a US tax form to avoid paying a higher rate of US to take on your profits, but tools like Stake can help you and I will explain this later.

The time zones are different

Australia is in the southern hemisphere and half a planet away from the US. The US time zones are around 15-18 hours behind in its’ time zones so the markets will be open during Australia's best sleeping hours.

That's ok, as unless you are an active trader you can always set trades to happen while you are asleep and put orders in so that you don’t need to be online to do it while the market is open.

There are two main exchanges

Here in Australia we have the ASX where the vast majority of stocks are traded i.e.. All in the one place.

In the US there are two popular exchanges – the New York Stock Exchange (NYSE) and the NASDAQ. These two exchanges carry most of the companies you are probably thinking of buying.

Stake is setup so it's like having the option of everything brand Woolworths or Coles right next to each other, rather than just the one marketplace.

The good news is the Stake share trading platform allows you to trade on both exchanges so in reality there is no difference between which you are looking to buy and invest in.

It might be more in the research phase of your investing practice that you find things different as stock codes and prices are available on the exchange the company is listed on.

NASDAQ is popular for technology stocks and does not have a trading floor, whereas the NYSE is based in Wall Street and most photos, images, or shows that you’ve seen represent the now older way of buying and selling stocks via physical location.  

There are thousands of companies available

Stake Australia claims to have over 3800+ individual companies and ETFs available to trade via its app.

The Australian market in comparison has around 2000 on the ASX, with the bulk of the value being in the top 200 stocks.

The S&P 500 is an index that covers the top 500 large-cap US companies and is a good comparison to the ASX200.

The US markets also have a heap of ETFs that are not available via the ASX. In Australia it's common to get market covering ETFs like IVV (S&P 500) or VAS (ASX200) or VTS (entire US Stock market) but via Stake share trading you’ll find ETFs for things like the Cannabis market, internet of things, or obesity.

There are some of your most obvious differences between Australian investing and US investing, so let’s take a look at Stake and see why it might be the tool for you.

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Here is why I love using the Stake App (including its fees)

As someone who was waiting for Robinhood to come to Australia for years, it was great to see a homegrown business like Stake give Australians more opportunity to invest in the US markets.

Before Stake, the process to buy US stocks was not easy . Brokers would charge high fees, you needed to fill out a few forms and it just wasn’t as simple as buying stocks in the ASX.

Since we all now live in the future, we get cool companies like Stake Australia giving you new ways to do things you've wanted to but in a much easier way.

So what makes Stake the best way to trade us stocks from australia?

No brokerage fees and minimal costs

Unlike CommSec (up to .31% of your investment per trade) or Self Wealth ($9.50) you do not pay anything to buy or sell a US stock.

The minimum amount you need to have included in a trade is $50 USD. So you can buy or sell at least $50 worth of US stock fee free.

There are also no ongoing Stake fees, such as a monthly amount. There is a $9 premium “Stake Black” account you can upgrade to but that is an upgrade rather than essential.

How Stake makes money is when you transfer your money in to buy US stocks. These are called FX fees. It takes .7% of the money you trade in.

To give you an idea of the exact cost if you transferred in $1000, Stake would take a cut of $7. This is fairly reasonable considering you don't need to incur anything else to buy US stocks in Australia.

There is also an express fee so if you want your money to be added to your account as quickly as possible. This means you get your money in ready for share trading at the start of the trading day, rather than the end.

The Stake fees for an express transfer is 0.5% in addition to the .7%, so .12% in total per transfer. Per $1000 transferring in with the express option this makes the total cost $12.

Low Stake fees baby

You can buy fractional shares

This is easily the biggest benefit of the platform. Allowing fractional shares means you don’t need to be a minimum of one stock. You can buy a percentage or fraction of the share dependant on what you want to invest.

For example, say you wanted to invest $100 into Amazon, traditionally you couldn’t. The price is well over $3000USD.

With Stake’s feature of fractional investing, you can buy 0.0325 of an Amazon stock. Brilliant.

This way of investing means you can manage your budget and include absolutely any company as the stock price is not an issue at the time of purchase.

Stake has an easy to understand interface

I love the simplicity and ease that Stake has set up its interface. Black and White, minimal menu and obvious buttons.

You think this is a fairly basic thing to comment on, but I’ve found online brokers overcomplicate the amount of information they present and show to you that it triggers you to do something you probably shouldn’t.

The app doesn’t push you to do anything and just shows you a dashboard summary, a watchlist, and the ability to research or lookup US stocks.

Transferring in money

The number of options available to transfer in money for investing is great.

Send money from your bank account via POLI and get money in the next day.

You can do regular bank transfers that take an extra day longer.

When I started the only way was to setup what’s called an AUD Wallet.

This is a separate Australian bank account that is connected to your Stake Account.

You would transfer your money there first then via Stake would transfer from that account into USD.

So there are a few options available, and I would say if your bank supports POLi then it’s the quickest and simplest way.

Coming Soon to Stake – Buy and sell Australian shares

So in late 2021 Stake is planning to open up share trading on the ASX. They have also announced that brokerage will be $3 per trade.

This is a very low price, with my current Broker SelfWEalth charging $9.50 per trade.

They have admitted it'll be break-even for them, but they are keen to open up the opportunity to become every investor's choice for that want to buy US stocks AND ASX shares regularly .

You can sign up here to get on the waitlist for when the feature goes live.

Key features of the Stake App

Setting up an account

Like most online brokers, you will need to provide a few details and pieces of identification to set up an account.

Of course, you’d want to sign up with a link like this to enjoy a free stock when you transfer in money

You’ll need to be 18, living in Australia and be an Australian resident to join, that is if you are registering as an individual (like I did).

You’ll also need a passport or driver's license to confirm your identification.

The process is very easy and obvious so shouldn’t have you reaching for anything uncommon.

It does take a few steps to process all your information, so don’t expect to be signing up and share trading on the spot.

Here’s a summary of steps for how I set up my account

  • Completed sign up form (with identification)
  • Account was confirmed.
  • Could login to account
  • AUD Wallet setup (optional) so I could transfer money in
  • Transferred AUD money to that account
  • Transferred money form AUD to USD
  • Started buying.

Researching US stocks with Stake

Ok so now you have an account it's time to find something to buy.

While Stake provides a great overview of the companies available for share trading, I wouldn’t say that it’s a research tool.

What that means is that you probably should be doing more research outside of the tool before coming here to buy.

There is a good amount of data that comes through and if you are looking for prices, basic financials, and links to related news then it’s all there.

Company page view
Financial analysis charting

I guess you can compare Stake to a supermarket, a really good one with heaps of variety. Apart from reading the labels and comparing a few other options around you, you probably want some other kind of information before buying something for the first time.

Personally, I use Simply Wall St for most of my research into companies before buying or you can upgrade to Stake Black to unlock more historical data which is $9.

Other information on the individual stock pages are things like views and trades counters that other members of Stake had racked up. Nice to see, but really shouldn’t be influencing your decision-making.

How to buy and sell

You’ll need to head to the individual company you want to buy or sell to trade. This is a bit different from other brokers that have a share trading page where you then look up to find the company.

You have three options with your order types.

  • Limit – set the highest price you want to pay for that stock (per share)
  • Stop – Buy the stock once it gets to a certain price that you set
  • Market- Pay whatever the price it is at now.

The way to sell is very similar.

The market is the simplest form of share trading as you are buying or selling at market price. The other two are more specific so if you need to set these then Stake makes them available for you.

If you are interested in trading fractionally then you will notice when you are doing a Market order, the estimated shares will update to show you how much you will own.   

You can also order fractionally with Limit or stop orders, but you will need to specify what fraction of a share would like

Managing your stocks

Once you have US stocks bought, they sit in your portfolio.

Here you can see the amount of the stock you own, the units, the average price you paid, the day change, and total change.

It’s nice to have this info on one page, but I use the tool Sharesight to cover all my performance and reporting.

Reporting and transactions

In terms of reporting, apart from the dashboard, there is not much to see. Not that you need to find anything else, but there are a few features available.

Activity – quickly see what date you bought or sold particular shares. Basic details.

Day trade settings – If you like there are a few options here as your account may be restricted if you make more than 3-day trades in a 5 day period. A day trade is when you buy and sell in one trading day (US time).

Account statements and reports can be found if you are looking for summaries of your trading as well as a timeline on your deposits and withdrawals, including when you moved money from AUD to USD and vice versa.

Answers you probably want to know about Stake Australia

How does Stake handle US Tax forms, like the W-8BEN form?

As a foreigner or non-US resident, you will need to complete a W8-BEN form when you buy US stocks. Completing these forms reduces withholding tax from 30% to 15%.

Previously you needed to fill out this form separately.

The beauty of Stake is that they will digitally complete this form for you. Working with either US broker-dealer, they take care of this process for you.

What are the Stake fees and costs to use the Stake app?

To open a Stake share trading account is completely FREE (in fact you can get a free stock when you do so and add some money in).

There are $0 costs to buy or sell shares including fractional shares.

What you do get charged for is to transfer money from AUD to USD.

You need to trade on Stake with USD so being in Australia you need to move your money from one currency to the other. So you'll send money to an Aus bank account then via the Stake app transfer that money to their USD account.

The cost of this is 70 basis points or 0.7%. For example, if you moved $500 from AUD to USD, Stake would take 0.7% of the AUD amount but charge you in USD. Note that you are charged USD.

So if $500 AUD is $378 USD, then the fee would be 0.7% of $500, so $3.50 but in USD.

It might be tricky to get your head around at first but this is the one and only fee structure you need to understand.

Another fee you may pay is an express fee which is 0.5% on top of your FX fee so that your money gets added a day earlier.

Stake Black is a premium membership to Stake share trading, which is $9, and will talk about that below.

Does Stake help with tax Reporting?

Stake can help you but will not guide you with your tax, so you need to be aware of your obligations or send what you need to a tax accountant.

Here is what reports Stake can provide

  • List of trades
  • List of transactions
  • FX trades.

Stake recommends tools like Sharesight to help with your reporting.

Will I get dividends?

Dividends get paid to your trading account, which is the cash account you send money to buy US stocks.

You will receive dividends even if you have fractional shares, you just receive the same fraction that you own.

When a dividend is paid you will have either 15% tax withheld (if you completed a W8 form) or 30% (if you didn’t complete the form).

Stake doesn’t offer dividend reinvestment

What are the time zones for trading?

The NYSE and NASDAQ exchanges are open 9.30 – 4pm Eastern Time, which is around 15 hours behind the east coast of Australia.

For me, this normally means the market opens late-night Australian hours and closes around dawn the next day.

Even with these hours making it awkward to be awake the full trading day, you can still place orders 24 hours a day and they just get fulfilled when the market is open.

What options for trading options are there?

You can place limit orders, market orders, and stop orders with Stake share trading.

Stake vs CommSec – what are the differences?

Mostly the cost and ease of use. Stake wins on both counts.

CommSec has more variety of companies available and better research tools but you do pay for them.

Commsec is your fully featured online broker. It has a number of options and research tools available for investors. It does come at a cost and will cost you more than Stake to trade and hold an account.

The biggest difference is that only CommSec lets you trade on the ASX by default. You will need to apply for an International trading account to buy US stocks (or other global markets). The benefit of using the Stake app is that your account is ready to go much sooner if you want to start trading US stocks from Australia.

Can you trade ASX on stake?

No, you can't currently. Stake Australia has announced it will be adding ASX trading to its platform at the cost of $3 a trade which is as cheap as it'll be for an Australian broker.

In the meantime the ASX broker that I use is SelfWealth.

The best way to use Stake

If you are brand new the best way to buy US stocks from Australia via Stake share trading is to start with these steps:

1. Sign up

Ok, so pretty obvious but there is no overwhelming forms or process involved. Stake just asks for a few details and you will have your own FREE account.

2. Transfer some AUD into USD

To understand the process involved in moving money and preparing to buy, try the transfer process. This involves sending your AUD into an account where it's transferred to USD. The minimum is $50 to send and you will also get a free stock for your troubles.

3. Watch your free stock

Without buying anything or using your money that should be in your trading account now, you can see what happens to that free stock you now should have received from Stake.

Take note of the market opening and closing hours, what your dashboard looks like and how your stock performs.

You can always move out that money if Stake is not for you. The free stock should be able to cover the Stake fees that you may have spent (if you transferred a low amount).

What is Stake Black?

If you are feeling like you really want to make a go of this US trading thing, then Stake Black might be for you.

It’s actually a pretty good tool as it expands the product so that you get the following:

  • Instant buying power on sell trades – Don’t wait for money to settle before you buy again
  • Buy and sell ratings from analysts – what they recommend to do
  • Price targets on stocks from the pros – what price to look out for
  • Full company financials and data – deep dive into the business you are about to buy

For $9 a month or $90 a year this is actually really good value. The ability to aggregate all the data from analysts and companies is very very convenient.

The money comes out of your cash account so pretty easy to pay for.

The ability to get instant buying power is another benefit as you will otherwise be waiting for a couple of workdays for any money from shares you sell to be available to spend on buying.

For $9 a month, it's’ worth trialing to see the data you get as you can always cancel anytime.

So what are you waiting for? Start trading US stocks from Australia.

Stake is your simple, convenient and clear way to buy US stocks in Australia. Whether you want to have a go at it, buy and hold for the long term, or trade regularly I think it’s one of the best tools out there.

It’s also a product that continues to evolve. In my time since joining in 2018, the interface and options have grown significantly so enjoy seeing new features added every now and then.

Be sure to sign up for a free account (use the code carlye366) and have a look around to see how straightforward the process can be. There’s also a free stock on offer if you do transfer some money in.

As they say at Stake – Hello Wall St!

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