Want to give someone the gift of Apple shares, but don’t want to pay the current $118 stock price? SparkGift gives you the ability to purchase partial shares for someone. Instead of buying an entire share of Apple you can spend as little as $20. Most online and traditional brokers will not allow you to do this, and there are more than 6,000 different stocks and index funds for you to choose from.

Teaching Kids About Investing From an Early Age

One of the most important things about being a parent is teaching your kids valuable lessons early on in their lives. Being smart with money and watching it grow is just one of those lessons. Parents can set up a SparkGift account for their children and over time people can make contributions into the account. This will let your child watch their account grow, no matter how old they are.

“Americans aren't saving enough. The US Personal Savings rate has steadily declined since the 80s, and this is a big problem. Yet at the same time, consumers spend billions giving gifts to one another,” said Peggy Mangot, SparkGift founder and CEO. “We thought, if we could make it easy, fun and affordable to give investments as gifts, just as our parents and grandparents used to do with savings bonds, we could help more people save, invest and learn about personal finance.”

How it Works

When someone makes the decision to give a gift using SparkGift it is a pretty easy transaction. The first thing that they need to do is pick the investment that they want to gift and the amount. Most people will usually pick blue-chip stocks or index funds. SparkGift will the deliver what is essentially an eGift certificate to the recipient. They are given instructions on how to set up an account with SparkGift. Accounts are opened with Folio Institutional, an online brokerage firm that handles all of the SparkGift trades.

It’s Not the First Time This Has Been Done

The concept behind SparkGift isn’t unique. A lot of brokerages willallow you to set up custodial accounts for minors. There have also been other startups that have attempted gifting investments online, but most of them have struggled to gain traction in the market. What sets SparkGift apart from the rest is that their interface is very user-friendly and the amount of time it takes to complete the process is minimal.

“SparkGift provides a beautiful customer experience paired with best in class broker technology,” said Mangot. “Giving a gift on our platform is simple, elegant and rewarding.”

How Does SparkGift Make Money?

The pricing model for SparkGift is pretty simple and straightforward. The company will charge $2.95 for each transaction that is made, plus 3% of the total value of the trade. For the remainder of 2015 SparkGift is waiving their 3% fee on all trades under $100.

The Future for SparkGift

Because the company is still in its infancy, the features are pretty limited. You do not have the ability to research your investments so this will all need to be done with a third-party website. Knowing what stocks or funds you want to gift beforehand is highly advisable.

The plan is to start adding additional investment education tools in the future, but right now they are focused on providing a simple platform without a lot of complicated extras.

More than half of the stocks and funds that have been gifted through SparkGift have been given to a minor, and nearly a third have been to children under three-months-old. The idea is to establish a long-standing relationship with customers. The hope is that they can act as their investment advisor or suggest another company (which would most likely include a referral fee paid to SparkGift).

The Bottom Line

With online robo-advisors gaining popularity quickly, a company like SparkGift could prosper. Having the ability to give the gift of an investment is perfect for parents looking to teach their kids good money habits from an early age. 

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