Hatch vs Stake - Which one is best for you?
Read, learn, and compare Hatch and Stake with help from MoneyHub's financial experts. Let us help you pick the best investment platform
Updated 9 August 2020
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:
Know this first:
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.
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. Since launching, it has grown fast. In April 2020 dropped its fees from US$8 to US$3 per trade (up to 300 shares, $0.01 per share from there). The Wellington-based firm offers a web-only platform (no app) and has facilitated hundreds of thousands of trades since launching.
- Stake takes a different approach to Hatch, offering zero trade fees and an app. It's based in Sydney and launched in New Zealand in May 2020. The free trading feature is unrivalled by Hatch and NZX-focused Sharesies and is arguably Stake's biggest selling point. However, Stake charges regulatory fees (generated when selling shares), whereas Hatch includes them in their trading fees.
- All dollar ($) 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.
Read our comprehensive Hatch Review
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Read our comprehensive Stake Review
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What is Hatch?
Hatch was the first New Zealand-based web platform to offer easy access to US-listed stocks and ETFs. The platform has grown in popularity, with a surge during the COVID-19 lockdown. Hatch offers 3,500+ investing opportunities, fully supported by its Wellington team. Its fees are simple to follow, and we outline these below. 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.
What is Stake?
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 75,000 Australian customers. It offers 3,700+ 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.
Hatch vs Stake: The Similarities
- Both platforms only allow funding from your NZD bank account. Hatch requires a bank transfer, whereas Stake only accepts POLi transfers. You can't fund your trading account with a debit or credit card.
- Neither Hatch and Stake are registered as a 'financial product' by the New Zealand Financial Markets Authority (FMA) due to the fact they only provide access to trading opportunities in the US share markets. Right now, Stake isn’t listed on the NZ Financial Services Provider Register, but having reached out to their management who say they are working alongside with the FMA to ensure compliance.
- Both use the same broker: Both access the US share markets via their partner DriveWealth, a US-regulated broker-dealer.
- Both offer protection. If either Hatch or Stake decide to shut down, you’d be given significant notice to sell up and get your money out, or transfer your shares from DriveWealth to a different US broker. In the case of a DriveWealth insolvency, under US regulation, your cash and securities flow back to you in the event of a liquidation. DriveWealth also has protections in place in the US, such as Securities Investor Protection Corporation (SIPC). Each customer account is insured for up to $500,000 (with a maximum of $250,000 in cash).
Fees: Who is Cheaper - Stake or Hatch?
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.
| Fee | Hatch | Stake |
|---|---|---|
| Deposit fee | 0.5% on the interbank rate, no minimum | 1% on the interbank rate, $2 minimum fee |
| Withdrawal fee | 0.5% on the interbank rate, no minimum | 1% on the interbank rate, + $2 (and minimum $10 withdrawals) |
| Brokerage fee | $3 flat fee to buy and sell up to 300 shares (then it’s $0.01 a share) for all order types (limit, market, stop-loss) | $0 market orders, then tiered pricing up to $19 a month subscription fee for access to limit and stop-loss orders and ‘premium features’ |
| Customer support | Free and unlimited | Paid plans get priority support |
| Regulatory fees | $0 - Hatch absorbs these | SEC fee: $0.231 per US$10,000 of sale proceeds, TAF fee: $0.0001119 per share with a per-transaction cap of $5.95 |
| W-8BEN filing fee | $1.50 | $5 |
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).
Going head to head:
Basic Break-Even Amount: If you are buying only into a single company where the price 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).
- If you trade JC Penny (JCP) at 25 cents/share, a $600 trade buys 2400 shares. With Hatch, the trade fee is $24 ($3 + 2,100 shares X 1 cent/share). If you sell them again for 25 cents/share, you'll incur another $24. With Stake, both trades would be free.
- 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.
- 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.
- 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.
- In an extreme example, if you take a punt on 'penny stock', you'd pay 1 cent/share with Hatch, which can add up if you're buying a lot of shares. By comparison, there would be no fee with Stake.
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 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).
Hatch vs Stake: The Key Differences
- Monthly charge: Hatch doesn't have any ongoing membership fee. Stake has three 'packs' (plans) - Starter ($0/month), Unlimited ($9/month) and Black ($19/month). The fee-based Stake packs have additional features.
- Stock selection: Both Hatch and Stake run on similar infrastructure, and the number of available investment opportunities are fairly equal between platforms.
- Funding and FX rates: Stake has twice the FX fee that Hatch does (and a $2 minimum fee), however they allow customers to fund via TransferWise and other FX companies. Hatch does not allow that. Furthermore, Stake also shows you the exact spot FX rate you get. With Hatch, you get an estimate FX rate as it's done offline, and your money arrives two days after you deposit.
- Avoid FX fee altogether: With Stake, you can fund your account directly with another FX service (and avoid Stake's FX service and fee). This means you won't pay the 1% on top of the spot rate. This is not possible with Hatch.
- Investing opportunities: Stake has 800+ more stocks and ETFs than Hatch (3,700+ vs 2,900+)
- Financial Services Provider Register: This is a contentious point, as Hatch is registered while Stake isn’t. Stake has advised they are working with the FMA to ensure compliance with regulatory framework and we will update this guide when more news in announced.
- Sign-up bonus: Stake offers a free share when new investors sign up and fund their account within 24 hours. The share will either be Nike, Dropbox or GoPro. Hatch also offers a sign up bonus of a $20 top-up if you make an initial deposit of $100 NZD of more (sign up using this link).
- Features: The platforms are fairly similar; both offer market orders and fractional shares free of charge. However, Hatch offers limit orders as part of their $3 trade fee whereas Stake excludes this unless you're on a paid pack. A range of new features are coming to both Hatch and Stake, and we continue to update this guide as they come to light.
- Website vs App: Hatch doesn't offer an app but instead directs users to its HatchInvest.nz website, which offers live trading functionality. It works exactly the same, and the website can be ‘appified’. Stake offers both a website and an app for Android and Apple.
- Functionality and market data: Both Hatch and Stake present live share price information when the US markets are open, as well as research tools and sorting functionality. Stake goes deeper, providing company news, candlestick charts and displays related shares. It also covers all the markets movers, which can be sorted by a number of factors. Top tip: As both platforms offer zero account fees, a good idea is to register and validate your ID with both and see which one you prefer. Best of all, you don't need to fund your account to experience the functionality.
- Portfolio transfers bonus: In a bid to attract new customers, Stake offers a free share in Dropbox when transferring your existing portfolio into Stake. Hatch doesn't offer any freebie stocks but allows you to transfer existing holdings into its platform and will help out with the fees your existing broker charges for the move.
- Portfolio transfer fees: Hatch states 'a fee to transfer shares out of Hatch depends on your new broker and fractional shares can’t be transferred' but have confirmed they will help out with the fees your existing broker charges for the move. Stake does not charge a fee for such transfer via ACAT, or $15 if it is made using DTC. To know your options you would need to talk to your existing broker. A sufficient cash balance is required in your Stake account to commerce the transfer.
- Express Funding: Hatch exchanges money every business day around 2pm – so if you deposit before 12pm, your money usually hits your Hatch account first thing the following morning – often before the US markets open. Stake offers 'Express Funding', at a 0.50% surcharge, which lets investors get into the market immediately. This is useful if there is there a big move to take advantage of.
- Stop Orders: Stake and Hatch both offer all order types (market, limit and stop). However, Stake's stop order feature only comes with paid plans. It lets you manage your portfolio dynamically while you sleep. I.e. you can elect to to buy or sell a share once the price of the share reaches a specified price. If markets move overnight, you don't need to be awake to take advantage.
- Connection to Sharesight: Hatch partners with fellow Wellington based company, Sharesight, to make portfolio and tax reporting super simple and easy, for both under and over $50,000 USD invested. Including FIF rule implications. Stake also partners to Sharesight.
- Support: Hatch is 100% online and open during NZ business hours (although their local Kiwi team is commonly found to be monitoring support channels well outside of those hours), whereas Stake offers 24/5 support (timed with the US market trading times) and also a phone number. All Hatch support is free and unlimited, whereas Stake offers priority support only with the $19/month Black plan.
- Access to new listings: Hatch makes new listings available to all customers immediately, Stake only allows customers on the $19 a month Black plan.
- Day trading: Hatch prohibits day trading, whereas Stake's 'Black' pack members can day trade as much as they like.
- Ownership: Hatch is owned by Kiwi Wealth, which is a part of the Kiwi Group Family.The Kiwi Group Family is owned by NZ Post, ACC and the NZ Super Fund aka the New Zealand government. Stake is Australian-based and privately owned.
- Interest earned on uninvested balances: Hatch states that the money market account you invest in pays interest in the form of dividends. Hatch investors currently receive around 1.8% annual dividends on their uninvested money. Stake makes it clear that interest cannot be earned - instead, Stake will earn any interest revenue paid on non-rentals which helps keep the trades fee-free.
Final thoughts
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:
Our Thoughts on Stake:
Overall
Do you have experience with Hatch and/or Stake that you'd like to share? Email our research team today.
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.
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.
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