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By Isla Thompson
Digital investment is a smart way to grow your money. Currently, it’s becoming popular here in NZ where the two best platforms for that are Hatch and Sharesies.
In this guide, we’ll look at these companies, the fees they offer and what those mean. Hopefully, this will help you decide which one of them you should invest with.
If you’re ready, let’s begin!
First off, here is a brief description of Hatch and Sharesies:
Hatch is a service that allows you to buy US-shares and ETFs. It was established in 2018 and is owned by Kiwi Wealth Ltd, which is the sister company of Kiwibank.
It is an excellent platform for beginners and experienced investors owing to its simple fee structure, friendly customer support, and reliable support articles.
Sharesies provides an easy-to-use web platform for all investors, whether young or old. It lets you invest in a large array of stocks listed on the NZ and the US markets.
It is a privately owned company that launched in 2017. Since that time, it has grown to become a preferred investment platform, now having over 320,000 investors.
Below is a comparison table of the fees charged by Hatch and Sharesies. All amounts are in US dollars, which is the main currency that the two companies use.
|Membership||Free||Based on portfolio value Free for $50 or less $1.50/month for $51 – $3,000 $3/month – $3,000+ $30/year for $50+|
|FX||0.5% – no minimum fees or add-ons for withdrawals||0.4% for exchanging US dollars to NZ dollars, or the reverse|
|Brokerage||$3 for 0 – 300 shares $3 + 1¢ per share for 300+ shares 50¢ for kids accounts||0.5% for orders up to $3,000 0.1% for orders above $3,000 + Management fee (for ETFs and managed funds)|
|W-8BEN tax form||$1.50 (one-off) + 50¢ per year||Free|
|Customer support||Free – online and call-back||Free – online only|
|Share transfer||For transferring in: Hatch accepts both USD and NZD *For transferring out: fees will depend on your new provider *note that fractional shares can’t be transferred||For transferring from a Common Shareholder Number (CSN) or Holder Number: free For transferring out: $5|
Let’s interpret the numbers we see in the data above.
First, there’s no membership fee for Hatch. However, for Sharesies, it’s based on the portfolio value you have, which is as follows:
$50 or less: free of charge
$51 – $3,000: $1.50 per month
$3,000+: $3 per month
$50+: $30 per year
For the foreign exchange fees, you would only have to pay 0.5% without any minimum or add-on costs for Hatch, whereas you need to pay 0.4% for Sharesies.
If you decide to buy or sell shares, there’s a flat fee of $3 for Hatch for 0 to 300 shares. Beyond that range, you will have to pay an additional 1¢ for every share.
In contrast, with Sharesies, you will have to pay 0.5% for the money you invested up to $3,000, then it’s 0.1% for an amount greater than $3,000.
The foreign tax filing is completely free for Shares is. However, for Hatch, there’s a one-off fee of $1.50 plus 50¢ yearly payment.
In terms of customer support, both come at no charge. Hatch can assist you via phone or online while Sharesies can offer support through the Web only.
So, which of them do you get more value from? In terms of fees, they actually match each other, so it’s hard to make a call as to which of them offers top value.
To figure this out, we’ll compute the price of Sharesies and Hatch considering the trade and FX fees. We chose sample values of $300, $500, $1,000, $2,000, $5,000, and $10,000.
|Trade Amount||Hatch||Sharesies||Better Value|
Based on the results, it’s clear that Sharesies offers a better value than Hatch, both for the range of $300 to $500 as well as for $5,000 and above.
That’s because its percentage becomes 0.1% when buying or selling shares that are higher than $3,000.
Let’s try computing the variables again, this time without transaction or FX fees:
|Trade amount||Hatch||Sharesies||Better Value|
As you can see, without the transaction fees factored in, you would get better value with Hatch for an amount more than $600 ($600 is where the companies break even at $3).
Hence, If you won’t often withdraw or deposit your money or change it into NZD or USD, Hatch should be your choice.
Just so you can have an easier time in picking between the two, here’s a a cost comparison after your trade amount has increased in size and you want to repatriate your money back to New Zealand:
|Trade amount (after it has grown)||Amount charged for Hatch (0.5%)||Amount charged for Sharesies (0.4%)|
Now comes the important question: which one should you invest in, Sharesies or Hatch?
We say that it depends on how much you are investing, what kind of investor you are, and your strategy for trading the shares.
Sharesies is great if you’re investing smaller amounts of US or NZ shares. Since the platform is easy to use, it fits rookie and seasoned investors alike.
On the other hand, Hatch fits investors who trade high-value stocks meant for the long-term, since the $3 flat fee can add up if small shares are bought frequently.
However, if you still can’t determine which service you should use, why not try them out so you can get a feel of using the platform to invest?
Besides, they don’t charge membership fees—unless you exceed $50 portfolio value for Sharesies, which would equate to $1.50 a month.
Frequently Asked Questions
Anyway, that’s our comparison of Hatch and Sharesies. As you can see, both have their merits and weaknesses.
Which one will you choose? Have you tried either one? Let us know how it goes for you!