Cash App's Investing Tile: What's The Deal?

Cash App Investing is a brokerage account service that allows users to buy and sell stocks and exchange-traded funds (ETFs). Users can invest in over 1,800 stocks and ETFs, with the option to purchase fractional shares of a company's stock for as little as $1. The Cash App Investing account is separate from the user's general Cash App balance, with the former holding the stocks or ETFs purchased, and the latter holding the funds received from selling shares. The Cash App does not charge any commission fees for buying or selling stocks or ETFs, making it a cost-effective platform for investors.

Investing account vs Cash App balance

When you start investing with Cash App, you create a brokerage account with Cash App Investing LLC. This is sometimes referred to as an Investing account, and it allows you to buy and sell stocks and exchange-traded funds (ETFs). The balance associated with your Investing account is different from your Cash App balance. The former is the total current value of your investments, while the latter is the money you have available to spend on the Cash App.

The securities in your Investing account are held by a third-party custodian, DriveWealth, LLC. The value of your Investing account is shown separately from your general Cash App balance. When making a stock or ETF purchase, funds are taken from your Cash App Balance. If more funds are needed to cover the remainder of the transaction, they are pulled from your linked debit card.

Any stocks or ETFs bought through Cash App Investing LLC are held by their carrying broker, DriveWealth, LLC. Once your stocks and/or ETFs are officially sold, the funds from the sale(s) will be automatically transferred to your Cash App Balance. The Cash App Investing account holds the stocks or ETFs that you purchase, but it does not hold the funds you receive when you sell your shares. Once you sell your shares, those funds are yours to spend on the Cash App however you like.

Cash App Investing accounts are considered "zero-balance" accounts. This means that the account maintains a cash balance of $0, but whenever you choose to buy stocks or ETFs, the purchase amount is transferred from your Cash App Balance. When you sell stocks or ETFs, the proceeds of that sale are automatically transferred out of your Investing account at DriveWealth and to your Cash App Balance.

Your Cash App Balance is not Securities Investor Protection Corporation (“SIPC”) protected, but it may be subject to other protections. Your Cash App Balance funds may be eligible for FDIC insurance.

How to buy stocks

Firstly, you will need to download the Cash App and open a brokerage account with Cash App Investing LLC. This will allow you to buy and sell stocks and exchange-traded funds (ETFs).

You can then add funds to your Cash App account via bank transfers or direct deposits from your paycheck.

Once you have money in your account, you can start investing. Cash App allows you to invest in over 1,800 stocks and ETFs, and you can choose to invest in a variety of stocks and ETFs with as little as $1.

To buy stocks, search for a company name or ticker symbol, then choose how much of the stock you want to buy, either from a preset amount or by entering a custom amount. The stock can be purchased using the funds in your Cash App balance. If you do not have enough funds available, the remaining amount will be debited from your linked debit card.

You can also set orders to buy stock a little at a time, on a regular schedule, or only when it hits your target price.

After your order is filled, you can view your investment by tapping the Investing tab on your Cash App home screen and scrolling down to My Portfolio.

It is important to note that stock purchases or sales can be scheduled 24/7, but orders will only be placed during market hours.

How to sell stocks

The Cash App allows users to buy and sell stocks and exchange-traded funds (ETFs) via Cash App Investing LLC, a brokerage account. The Cash App does not charge any commission fees for these transactions.

• Tap the "Money" tab on the Cash App home screen.
• Tap on the "Stocks Tile".
• Scroll down to "Stocks Owned".
• Select the company whose stock you want to sell.
• Select an amount or tap the "..." to enter a custom amount.
• Confirm the transaction with your PIN or Touch ID.

The amount from the sale will be automatically deposited into your Cash App balance. Depending on market activity, the sale proceeds may take up to 1-2 business days to be deposited into your Cash App balance. You can use these funds to buy more stocks, spend them using your Cash Card, send money to friends and family, or instantly cash out to your linked bank account.

It is important to note that selling shares may have tax implications. If you have questions about your particular tax situation, it is recommended that you consult a tax advisor.

Cash App Investing LLC

When you open an investing account with Cash App, you create a brokerage account with Cash App Investing LLC. This account allows you to purchase stocks and ETFs using funds from your Cash App balance. If more funds are needed to cover the transaction, they are pulled from your linked debit card. Any stocks or ETFs bought through Cash App Investing LLC are held by their carrying broker, DriveWealth, LLC.

The balance associated with your investing account is separate from your Cash App balance. The "stock balance" reflects the total current value of your investments. While Cash App Investing LLC holds the stocks or ETFs you purchase, it does not hold the funds received when you sell your shares. Once you sell your shares, the funds are automatically transferred to your Cash App balance, which you can use to buy more stocks, spend on your Cash Card, send money to others, or cash out to your linked bank account.

With Cash App Investing, you can invest as little as $1 in a company you love by buying its stock. You can also choose to invest in over 1,800 stocks and ETFs, with the option to buy fractional shares, which are less than one whole share of a company.

It's important to remember that investing involves risk, and you may lose money. Additionally, while Cash App does not charge a commission fee, there may be other fees assessed by government agencies or external brokerage transfer fees.

Cash App Investing costs and fees

Cash App Investing accounts are free to open, require no minimum balance to maintain, and do not charge any commission fees. However, there are some fees that are required by government agencies such as the SEC and FINRA. These fees are charged by the government agencies on all sell orders across the market, and Cash App Investing passes these fees along to the regulatory agencies without benefiting from them financially. The Trading Activity Fee (TAF) for equity sales is $0.000166 per share sold, rounded up to the nearest penny and will not exceed $8.30. The Securities and Exchange Commission (SEC) fee is $27.80 per $1 million of principal, rounded up to the nearest penny.

While Cash App Investing does not take a cut, there may be other fees assessed by government agencies or required by law. These fees will be disclosed prior to the finalization of a trade and listed in the trade confirmation. For example, fees for outbound stock transfers may apply.

It is important to note that Cash App Investing is a self-directed service, and users are solely responsible for the orders placed through their accounts. The platform does not provide investment advice or recommendations. Additionally, fractional shares investing, which is available on Cash App, may involve additional risks such as non-transferability.

When using Cash App Investing, it is essential to understand the different types of fees and costs associated with the platform. While it offers a convenient and accessible way to invest, users should be aware of the potential fees that may apply to their transactions.

Frequently asked questions