Hatch vs Stake - Which one is best for you?

Updated 31 May 2021

If you’re comparing New Zealand-operated online brokerage Hatch with Australian-based newcomer Stake, our guide walks you through the differences that matter. In this guide, we explain:

• What is Hatch?
• What is Stake?
• Similarities
• Fees: Who is Cheaper - Stake or Hatch? 
• Key differences
• Final thoughts

Know this first:

• Hatch was established in 2018 and is owned by Kiwi Wealth Ltd, which is a sister company of Kiwibank and is part of the Kiwi Group family, making it the only New Zealand owned investment platform where you own your shares through your own individual US brokerage account. Their fees are US$3 per trade to buy or sell (up to 300 shares, $0.01 per share from there) and a 0.5% exchange fee. There are no subscriptions fees.The Wellington-based firm offers a web-only platform (that can be pinned to your home page like an app) and has already had over New Zealanders join as at June 2021.
  
• Stake takes a different approach to Hatch, offering zero trade fees and an app. It's based in Sydney and launched in New Zealand in May 2020. The free trading feature is unrivalled by Hatch and Sharesies and is arguably Stake's biggest selling point. However, Stake charges regulatory fees (generated when selling shares), whereas Hatch includes them in their trading fees.  
  
• All dollar ($) values below are expressed in USD, which is the functional currency of Hatch and Stake by way of trading and fees. 

Be aware: Hatch and Stake only offer trading in US stocks and not any other country. If you're looking to make an investment in New Zealand companies, please read our guide to Sharesies, InvestNow and our general how to invest in shares guide.

Hatch is the first New Zealand-owned web platform to offer easy access to US-listed stocks and ETFs through your own individual US brokerage account, meaning you directly own your shares. The platform has grown in popularity, with a surge during the COVID-19 lockdown, recently reaching a milestone of over 100,000 New Zealand-based customers. Hatch has also released a Kids Investment Accounts with a reduced fee structure. Hatch offers 4,100+ investing opportunities, fully supported by its Wellington team, via email, live chat and phone support. Hatch charges simple fees that are easy to follow, and they don’t take a percentage cut of your profits - it’s always 3 USD to buy or sell up to 300 shares (0.1c each share thereafter).

Hatch is providing a full featured and intuitive investing experience for beginners through to experienced investors, with a useful investor FAQ section explaining complex investing terms and making financial jargon easy to understand, as well as a Getting Started Course which helps beginner investors learn everything they need to know to get started in only 10 minutes a day for 10 days.

Stake is a full suite brokerage with app and web. It serves anyone accessing the US market with full functionality (all order types, day trading) and has over 170,000 Australian customers. It offers 3,900+ shares and ETFs. Per Stake's founding team, 77% of their investors have bought and sold shares before, so it appears to appeal to experienced investors. Stake emulates the offerings of neo-brokers like Robinhood which offer 0% commission brokerage. Launched in 2017 in Sydney, Stake was created by a small team, one of whom has worked as an equities trader in the US. From releasing version 1.0 of Stake to Australians in 2017, Stake has grown on the back of promoting its fee-free trade feature. Today, it's a serious player.

It’s hard to directly compare the fees because of the different price structures. This table compares Hatch and Stake's fee schedule side by side.

​Know this first: The fees charged by Hatch increase the more shares you trade (after 300 shares, the fee is 1 cent/share). Our examples explain the costs in detail (we have excluded the SEC and TAF fee, which for most trades won't be more than a few cents). The most popular stocks aren’t penny stocks, so we’ll use top traded stocks to compare the pricing differences:

1. If you trade in Tesla (TSLA) at $619.13 a share, a $1,000 trade buys you 1.615 a share. With Hatch you’d pay $8 to buy this based on a 3 USD order and a 0.5% exchange fee. With Stake you’d pay $10, with a 1% exchange fee.
   
2. If you trade in Apple (APPL) at $126.85 a share, a $1,000 trade buys you 7.88 shares. With Hatch you’d pay $8 to buy this based on a 3 USD order and a 0.5% exchange fee. With Stake you’d pay $10, with a 1% exchange fee.
   
3. If you trade in NIO (NIO) at $37.76 a share, a $1,000 trade buys you 26.48 shares. With Hatch you’d pay $8 to buy this based on a 3 USD order and a 0.5% exchange fee. With Stake you’d pay $10, with a 1% exchange fee.
   
4. If you trade Globalstar (GSAT) at $1.48 cents/share, a $600 trade buys 405 shares. With Hatch, the trade fee is $4.55 ($3 + 105 shares X 1 cent/share). If you sell them again for $1.48 cents/share, you'll incur another $4.55. With Stake, both trades would be free.
   
5. If you trade Microsoft (MSFT) at $200/share, a $600 trade buys 3 shares. With Hatch, the trade fee is $3. If you sell them again for $200/share, you'll incur another $3. With Stake, both trades would be free.
6. If you take a $10,000 position in Zynga (ZNGA), you'll hold around 1,300 shares. Hatch's trade fee would be $13 ($3 + 1,000 shares X 1 cent/share). When you sell, you pay again. Again, with Stake, both would be free.
7. If you take a $10,000 position in Facebook (FB), you'll hold around 50 shares. Hatch's trade fee would be $3. When you sell, you pay again. Again, with Stake, both would be free.
8. Important: Hatch does not allow penny stock investing; companies on their platform must reach certain requirements before being listed, such as: the company or ETF is listed on the NYSE or NASDAQ, the share price must be above USD 1. For companies, the market capitalisation should be greater than USD 1 billion; if market capitalisation is below USD 1 billion, Hatch may be able to request the company if the 3-month average daily dollar volume is greater than USD 0.5 million. Therefore it’s rare that normal long-term investors would significantly be affected by the 1c per share cost over 300 shares (after the USD 3 per trade fee) unless you were trading large volumes of shares from smaller priced companies.

Going head to head:

• The 1% FX fee charged by Stake, can, in some instances of low value funding, offset the benefits of the ‘$0 brokerage fee’. The dollar cost of an FX fee grows in proportion to your deposit, so the larger the deposit amount, the more you will be paying.
• For example, on a $1,000 deposit, you’re paying $3 extra to deposit via Stake, on a $10,000 you’re paying $30 extra. If you’re regularly depositing small amounts into Stake, you’ll be charged a minimum $2 FX fee each time, so top ups above $200 are best. Hatch charges no minimum FX fees.
• When it comes to brokerage, the $0 commission on market orders that Stake offers can offset the extra FX costs in some cases. Depending on how much you deposit, if you plan to trade regularly then Stake can easily work out to be cheaper.

Basic Break-Even Amount: ​If you are buying only into a single company where the price is above $2, Hatch charges $3 and a 0.50% FX fee. The break-even point where Hatch fees are cheaper than Stake is $600 in one transaction. But, this won't apply if you purchase a lot of shares so be careful as Hatch's 1 cent/share can add up.

Our view: It's not an easy comparison to make. Because of the different fee structures, it really does depend on how much you plan to deposit and withdraw, the order types you want to use and how often you plan to trade. With Stake and Hatch, you can reinvest your USD balance over and over, and with Stake's zero trading fees, you'll avoid the per-trade and 1 cent/additional share Hatch fee (although regulatory fees apply on top).

Unsure still which is right for you? We believe the right answer depends on your investing habits. Because both are free to use, you can register for both and see which one is right for you.

​Our Thoughts on Hatch:

• While you pay $3 per trade, the FX fee is half what Stake charges (0.50% vs 1.00% - and no $2 minimum fee) which is a significant benefit.
• Hatch offers a simple way to keep fee percentages low by allowing auto-investments into all 2,700+ companies and ETFs. Passive investors can deposit small amounts when it suits, then set a timeframe and amount to invest at regular, automated intervals without paying fees.
  
• Best for: Investors looking to deposit regularly and trade a few times a month and investors looking to grow long-term wealth through “set-and-forget” investing.
  

Our Thoughts on Stake:

• Free trading fees is the biggest selling point of Stake, although the 1.00% FX rate applied to funding and withdrawing USD means Stake makes its money elsewhere. It passes on the SEC and TAF costs to traders, so these fees (as small as they are) are deducted from qualifying trades.
• Best for: Investors who want to trade shares in multiple companies in big or small amounts. The Stake app makes this effortless, and the design and functionality of Stake, in general, will encourage frequent use.
• Not suitable for: Investors looking to place larger orders to hold for the medium or long term. Hatch's $3 fee is competitive when considering Stake's 1.00% FX fee for funding the trading account and 1.00% fee for withdrawing USD to NZD. Overall, you'll pay twice the FX costs using Stake when compared to Hatch.

Overall 

• Hatch has a simple fee structure and offers a lot more features than Stake's free-fee plan. You also get interest on your uninvested Hatch funds. However, active traders will incur many $3 trading fees using Hatch, whereas Stake offers unlimited free trading.
• Stake does charge higher FX fees (1% vs 0.50%), has minimum funding fees (i.e. $2), added extras (SEC and TAF fees) and doesn't pay interest on uninvested funds.
• What platform is best for you depends on how you want to invest and your chosen investing strategy. Active traders will likely prefer Stake for its zero brokerage fees, while more strategic investors will prefer Hatch for its lower FX fees. 

Do you have experience with Hatch and/or Stake that you'd like to share? Email our research team today.