I Dont Like This Restriction But Its Easy To Work Around
I had been holding on to my two free shares as a kind of laugh, since they didnt cost me anything, so I was disappointed to see that I had been punished for doing so. To withdraw the $8.96 of my own money, I would have to sell my share of Staples . Then I could reinvest the $8.84 or wait a few more weeks to withdraw it. Thats a weird hassle for a platform that Ive praised in the past for its simplicity and ease of use.
The workaround is simple: if you plan on using Robinhood to actually gamble or invest, simply sell your free shares as soon as possible, two days after receiving them. That will tie up your own cash deposits for the shortest possible time.
Want To Add To The Discussion
Stockpile Promotion: $5 Free Stock
Want some free cash for signing up to their program? Theyre giving out $5 in free stock when you sign up today.
The promotion is straightforward you can pick any stock you want and you get whatever $5 will get you based on the market closing price that day. If you pick a stock that closes at $50, then youll get 0.1 shares . There is no trading commission on this transaction, so you wont get $5 minus some fee. You get $5 worth of stock.
Whats nice is that since there are no maintenance fees, the $5 free offer is a legitimately $5 free. Also, if you decide you dont want shares of stock, you can convert it to a retailer gift card for free.
As of November 26th, 2018, Stockpile has ended its free $5 in stock promotion.
Tax Implications For Gift
The first thing to keep in mind when gifting stock is the gift tax.
For the year 2021, an individual can gift up to $15,000 to someone else without incurring the gift tax. For you and your spouse, the combined annual gift tax exclusion is $30,000.
Gifts over that amount count toward your lifetime gift exclusion$11.7 million as of 2021. However, if you havent gifted $11.7 million yet, you may not have to pay taxes on the amount that exceeds your annual exclusion. If youre planning to leave a large estate to your heirs, you could consider reducing its size by effectively utilizing the annual gift tax exclusions.
Do You Pay Taxes When Giving Stock As A Gift
Fun question with an even more fun answer: it depends! Ah, the favorite response of any financial professional.
Though, as noted above, more likely than not, you wont pay taxes when giving stock as a gift. At least so long as you keep your stock gifts below the annual gifting thresholds.
For a more in-depth discussion of the possible taxes you pay for gifting stock, lets take a look at the two types of taxes youll need to consider before transferring a stock certificate from your brokerage firm to kids, grandkids or other loved ones.
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How To Fund Your Robinhood Account
You can link your bank account to the app and fund your Robinhood account directly. These funds will appear as pending until they are clear in about 5 business days. Keep the money in your account for these 5 days to ensure that your transfer is not canceled due to a lack of funds. The company allows you to fund your brokerage account from various financial institutions.
Direct deposits allow you to use a paycheck from any job you choose as a means to fund your Robinhood account. You can also set up automatic deposits into your brokerage account on the mobile application. Just choose a schedule weekly, biweekly, monthly or quarterly and Robinhood will initiate the deposits automatically.
You can make up to 5 deposits per day totaling $50,000. Robinhood is a user-friendly site, allowing you to cancel transfers as needed.
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NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.
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Who’s Mad At Robinhood
A ton of people. The subreddit behind the GameStop’s skyrocketing share value, r/WallStreetBets, includes big users of Robinhood who felt they were slighted by the decision.
The said the freeze harmed small traders and favored the Wall Street establishment. “Individual investors are being stripped of their ability to trade on ,” the tweet said. “Meanwhile, hedge funds and institutional investors can continue to trade as normal.”
Robinhood users flooded the Google Play Store and Apple’s App Store with negative app reviews. There were so many one-star ratings that .
There’s was also a lawsuit filed on Jan. 28 in the Southern District of New York accusing Robinhood of “purposefully, willfully, and knowingly removing the stock ‘GME’ from its trading platform in the midst of an unprecedented stock rise … deprived retail investors of the ability to invest in the open-market.”
And the US Securities and Exchange Commission, which oversees the stock market, released a statement that didn’t name Robinhood but said it will “closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.”
While the executives were questioned by the committee, not much new information was uncovered in the five hours.
Great Stocking Stuffers For Kids
Investing for kids can prove a great way to gift this year. Consider reviewing the following custodial brokerage accounts in the table with special highlights on about a select few apps beneath.
It works best if parents and/or grandparents are involved in the process because it requires linked accounts from the custodians banks or brokerages.
The all-in-one plan teaches them important financial skills like money management and investing fundamentals with real money, real stocks and real-life lessons.
You can use the investing feature to:
- Buy fractional shares of companies your kids admire
- Start investing with as little as $1 in your account
- No trading commissions beyond the monthly subscription fee
- Parents approve every trade directly in the app on individual stocks and ETFs with a market capitalization of $1 billion+
Consider opening a Greenlight Card + Invest account to start investing in a custodial brokerage account for your kids today. The first month is free to trial the product and see if it meets your needs for giving a financial gift to kids.
Read more in our Greenlight Card review.
- Price: Acorns Lite: $1/mo, Acorns Personal: $3/mo, Acorns Family: $5/mo
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How To Research Stocks To Buy
Robinhood offers various assets you can invest in, from cryptocurrencies to stocks. The company allows you to trade with more than 5,000 stocks, including most exchange-traded funds and U.S. equities listed on U.S. exchanges. However, you shouldnt buy stocks without some basic investing knowledge.
Look at company annual reports, readily available on their websites. Reading a companys annual report allows you to easily value a company whose stocks you want to buy. You should focus on metrics like net income, revenue, price-to-earnings ratio and earnings per share .
Once youve settled on the stocks you want to buy, you can easily add them to your portfolio with just a few clicks, whether youre using Robinhoods website or mobile app. Then decide the type of order to place for your stock and execute trades according to your order preferences.
It is also wise to ensure that you temper any stock tips or trending investment strategies with evidence and common sense. Given the proliferation of social media investment trends that have, at times, caused the market to shift, you must understand when it is a good idea to invest your money in these trends. There is no such thing as a get rich quick scheme, but you can make some extra money if you treat these trends with care.
You can compare Robinhood vs. Ally Invest for stock investment options.
Here Is How To Get Up To $1000 In Free Stock
Why stop after one free share?
Okay, okay these shares are not necessarily no BS free by our definition.
But with minimal effort, you can receive up to $500 in free shares of stock.
You can earn more free stock simply by referring your friends and family to this app.
You can share your referral link via text, e-mail, Facebook, Twitter, and several other methods.
Once your friend uses your referral link, you will get a notification straight to your phone.
From there, you can log into your Robinhood account and go to your Past Invites to claim your free stock.
But act quickly you have just 60 days to claim your free share before it expires for good!
However, the free shares can be deposited directly into your account.
Additionally, you can sell your free shares after two trading days.
You can sell and cash out your free share 30 days after claiming.
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Penny For Your Thoughts
Robinhood’s retail investors also have a fascination with penny stocks — i.e., companies with share prices below $5. Examples include Canadian marijuana stock Sundial Growers, Zomedica, Naked Brand Group, and OrganiGram.
More often than not, penny stocks are stuck at a low share price because of operating or management issues. In other words, penny stocks are penny stocks for a reason. While retail investors might believe that buying penny stocks gives them a higher probability of doubling their money, this usually isn’t the case.
For instance, Sundial Growers has planted itself at No. 4 on the leaderboard for about six months. Even though cannabis is a rapidly growing industry, and Sundial was sitting on roughly $950 million in cash, marketable securities, and long-term investments, as of Aug. 9, the company is a mess. Management’s desire to raise cash at all costs has seen the company’s share count balloon from 509 million to 2 billion in nine months. This level of dilution is burying longtime shareholders and all but assures the company will have no shot of generating meaningful earnings per share.
The icing on the cake is that while Canada’s legal weed sales rise, Sundial’s revenue is declining. In sum, there’s a really good reason this stock is stuck below $1 a share.
Buying Stock For Children
Stocks can be thoughtful gifts for kids to get them interested in finance and could give them a leg up into adulthood.
Children under the age of 18 cant legally buy or wholly own stock. However, a parent or guardian can open a custodial account registered under an adults name until theyre old enough to have it on their own. When the minor turns 18, you can transfer ownership solely to them.
Or you can open a 529 college savings plan on their behalf and contribute to it as often as youd like. Others can also make contributions.
Microinvesting for kids
Another option for kids is to open an account for them through a microinvestment or robo-advisor platform. Its a fairly new idea, but some investment apps now have specific accounts for children that parents can set up.
Robo-advisors invest your money into a curated portfolio of stocks or other products based on your profile or preferences. Because its an online service, you pay a much lower fee than you normally would through a regular investment adviser or stock broker.
The investments held in the account are not wholly owned by the child, but held by the adult until they turn 18. The advantage here is that theyre easy to set up, theyre often cheaper than adult accounts or free and the apps charts and interactive features make it easier to visualize investing.
Popular investment apps offering childrens accounts:
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What Are The Best Stocks To Give As Gifts
Giving stocks as gifts is quickly becoming a holiday tradition, at least among investment-minded households. A few years ago, Kanye West surprised his wife Kim Kardashian with stocks for Christmas, which got many people talking on social media.
If you plan to buy stock as a gift, what are the best stocks? Why do stocks make good gifts? Is it easy to buy stocks a gift?
About The Site Author And Blog
In 2018, I was winding down a stint in investor relations and found myself newly equipped with a CPA, added insight on how investors behave in markets, and a load of free time. My job routinely required extended work hours, complex assignments, and tight deadlines. Seeking to maintain my momentum, I wanted to chase something ambitious.
I chose to start this financial independence blog as my next step, recognizing both the challenge and opportunity. I launched the site with encouragement from my wife as a means to lay out our financial independence journey and connect with and help others who share the same goal.
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How Does Stockpile Work
You can gift shares through Stockpile gift cards. Theyre issued by Stockpile Gifts and available as physical or e-gift cards.
The fee structure on e-gift cards is similar to gift cards at a store. You pay $2.99 for the first stock plus 99 cents for each additional stock. You also pay a 3% credit or debit card fee on the total price.
If you want to send physical gift cards, there are three set amounts $25, $50 and $100. The fee ranges from $4.95 to $7.95 depending on the face value of the card:
- A $25 gift card costs $29.95
- A $50 gift card costs $56.95
- A $100 gift card costs $107.95
When the recipient gets the card, they open their account and select what shares they want. They pay no trading fee on this purchase because youve already paid for it through the fees on your end.
When the recipient opens an account, they can acquire whatever stock they want. It doesnt have to match the card.
Stockpile does not offer any penny stocks, pink sheets, foreign ordinaries , or any stocks trading below $6 per share. Their explanation is that fraudsters often gravitate to these stocks because theyre easier to manipulate due to their low trading volume. Im not sure all sub-$6 stocks are targets but its a plausible explanation.
As An Early Step Toward Passing Down Wealth
If youre thinking about your legacy, gifting stocks can be a valuable tool, as opposed to liquidating and paying capital gains taxes. The IRS allows you to gift up to $15,000 per year, per person including stock.
This $15,000 limit isn’t bound by familial or marital ties. So technically, you could give $15,000 in stock to all of your children, grandchildren, in-laws, friends and neighbors each year.
About the author:Chris Davis is a NerdWallet investing writer. He has more than 10 years of agency, freelance, and in-house experience writing for financial institutions and coaching financial writers.Read more
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