What Is Hatch and How Does It Work?
Hatch is an investment app that gives Australians direct ownership of US stocks through a DriveWealth LLC brokerage account (the same underlying US broker used by Stake). This means your US stocks are held in your name with a US SEC-regulated broker. Hatch supports investing in thousands of US-listed stocks and ETFs, including fractional shares — you can invest as little as $10 in any stock.
The app itself is mobile-first, available on both iOS and Android, and designed specifically for Australian investors. When you open a Hatch account, you're essentially opening a US brokerage account that's managed through the Hatch app interface. This is fundamentally different from buying US shares through an Australian bank like Westpac or NAB, where you're typically buying through their own platform with higher fees.
Here's how the process works in practice: you deposit AUD from your Australian bank account into Hatch, the app converts your money to USD (with a small fee), and then you can immediately buy any US-listed stock or ETF. Your holdings are reflected in real-time during US market hours (which run from 1:30 PM to 8:00 PM AEST, or 9:30 AM to 4:00 PM EST). You'll receive US tax documents at the end of each financial year if you've earned dividends — more on that later.
One of Hatch's strongest features is fractional share investing. Rather than needing $500+ to buy one share of a company like Amazon or Berkshire Hathaway, you can invest $50 and own a proportional slice. This removes a significant barrier for young Australians or those just starting their investing journey.
Hatch Fees: Breaking Down the Real Costs
Understanding fees is crucial before choosing any investment platform. Hatch's fee structure is relatively simple compared to traditional Australian brokers, but there are some nuances worth understanding.
The 0.50% FX Fee: Your Main Cost
Hatch charges a 0.50% foreign exchange (FX) fee when converting AUD to USD. This is the primary cost you'll encounter. Let's put this in practical terms: if you deposit $1,000 AUD into Hatch, the FX fee is $5. On a $10,000 deposit, it's $50. On a $500 deposit, it's $2.50.
This 0.50% rate is competitive in the Australian market. For comparison, Stake charges 0.70% standard (though they occasionally offer 0% promotional rates). Traditional banks like Westpac charge significantly more — typically 1.5–2.5% — when you're buying US shares or converting currency.
The fee applies only when you're converting AUD to USD. If you already have USD in your account and you're buying shares, there's no additional FX fee. Similarly, when you eventually sell shares and convert back to AUD (to withdraw to Australia), there's another 0.50% FX fee on that conversion.
No Per-Trade Brokerage Fees
Hatch doesn't charge you per transaction. Whether you buy 1 share or 100 shares, whether you make 1 trade or 50 trades per month, there's no commission per trade. This is standard across modern platforms like Hatch and Stake, and it's a huge advantage compared to older brokers like Interactive Brokers (which charges per trade) or traditional Australian banks.
Account Inactivity and Other Fees
Hatch doesn't charge account inactivity fees, account management fees, or monthly subscription fees. If you open an account and leave it dormant for a year, you won't be charged. This is attractive for casual investors who might not trade frequently.
Dividend Tax Implications for Australians
This isn't strictly a "Hatch fee," but it's a cost you need to factor in. US dividends received by Australian residents are subject to Australian tax. The US withholds 15% on dividends (due to the US–Australia tax treaty) before it reaches you. You'll then need to declare this income in your Australian tax return. The ATO considers this foreign income, and depending on your tax bracket, you might owe additional tax, or you might get a credit. For example, if you're in the 45% tax bracket and receive $1,000 in US dividends, the US withholds $150, but you might owe the full 45% to the ATO ($450), meaning an additional $300 tax bill.
This is why many Australian investors favour ETFs that don't pay dividends (or pay very low dividends) when investing in the US market. Index funds like VOO (Vanguard S&P 500 ETF) have very low dividend yields (around 1.3% as of 2025), whereas individual dividend stocks like Microsoft or Coca-Cola pay 2–3%.
Getting Started: Opening a Hatch Account
The account opening process is straightforward and designed for mobile-first users. Here's what you'll typically do:
- Download the Hatch app from the App Store or Google Play
- Enter your email and create a password
- Provide personal identification (name, date of birth, Australian address)
- Link your Australian bank account for deposits and withdrawals
- Pass identity verification (usually takes a few minutes)
- Make your first deposit via bank transfer from your Australian bank
The entire process typically takes 10–15 minutes, and you'll be ready to start investing the same day. Hatch uses standard ASIC-compliant identity verification, so you'll need to provide legitimate documentation — there's no way around this due to anti-money-laundering regulations in Australia.
Once your account is open and you've made your first deposit, you're ready to buy US stocks. The app shows you real-time US market prices, allows you to search for any US-listed stock by ticker symbol, and lets you place buy orders immediately (during US market hours).
Hatch vs Stake: The Direct Comparison
Hatch and Stake are directly competing for the same market: Australians wanting low-cost US stock access via a mobile app. Both use DriveWealth as the underlying US broker, which means the fundamental infrastructure is identical. However, there are meaningful differences worth understanding.
Fee Structure
Hatch charges 0.50% FX on AUD-to-USD conversions. Stake charges 0.70% FX as standard, though they frequently run promotions offering 0% FX for new users or during specific periods. If you're a new Stake user, you might lock in 0% FX for your first deposits, making Stake cheaper than Hatch. However, once those promotions end, Hatch is cheaper. For existing Stake users, switching to Hatch would save you 0.20% per conversion, which adds up if you're regularly depositing.
User Experience and App Quality
Stake has a slightly more polished mobile app, with better UX design and more intuitive navigation. The Stake app also integrates features like a built-in news feed, stock analysis tools, and educational content within the app itself. Hatch's app is functional and clean, but less feature-rich. If you're an investor who enjoys learning and staying informed within the app, Stake edges ahead.
Community and Social Features
Stake has built a stronger community around its platform, with features like social trading feeds and the ability to see what other Stake users are buying. This can be motivating for some users and a distraction for others. Hatch has kept things simpler, with less emphasis on community features. For serious, independent investors, this is probably a positive.
Account Features
Both platforms offer fractional shares, both support thousands of US stocks and ETFs, and both have similar account structures. Hatch does allow you to hold fractional shares indefinitely, which is useful. Stake also supports some additional features like limit orders (setting a price at which you want to buy or sell), which Hatch may not offer depending on the specific time of writing.
Withdrawal Speed
Both platforms process withdrawals similarly, with funds typically returning to your Australian bank account within 1–3 business days after you initiate the withdrawal.
Bottom Line: Which Is Better?
For most Australian investors, the difference is minimal. If you're brand new to investing and want a polished, educational experience, Stake might edge ahead. If you're focused purely on low costs and don't care about fancy features, Hatch is the better choice. If you've already got money invested in Stake, switching isn't worth the hassle unless you're planning to deposit a very large sum where the 0.20% fee difference becomes substantial.
Hatch Safety, Regulation, and Custody of Your Shares
This is critical: where are your shares actually held, and what happens if something goes wrong?
Regulatory Structure
Hatch itself is regulated by ASIC in Australia. The company is incorporated in New Zealand but operates under ASIC's oversight for Australian users. Your underlying US stock brokerage account is held with DriveWealth LLC, a US company regulated by the SEC (Securities and Exchange Commission) and FINRA (Financial Industry Regulatory Authority) in the United States. This dual regulation provides meaningful protection.
SIPC Protection
If DriveWealth or Hatch were to go bankrupt or collapse, your shares would be protected under SIPC (Securities Investor Protection Corporation) up to $500,000 USD. This covers loss of your shares due to broker insolvency, though it does not cover investment losses (i.e., if your shares lose value, SIPC doesn't reimburse you). For most Australian investors, $500,000 USD is more than enough coverage.
Segregated Accounts
Your shares are held in your own name at DriveWealth, not in Hatch's name. This means even if Hatch went bust, your shares would still be yours — they're registered in your name with the US broker. This is a gold standard for investment security.
Tax Residency and US Reporting
Because you're a non-US resident opening a US brokerage account, you'll need to provide a US tax ID number (ITIN) or confirm your Australian tax residency. Hatch handles this during signup. At the end of each US tax year, you'll receive a 1099 form showing your dividend income and capital gains. You'll need to report this to the ATO in your Australian tax return.
What Stocks and ETFs Can You Buy on Hatch?
Hatch gives you access to the full US stock market. You can buy:
- Individual stocks: Apple (AAPL), Microsoft (MSFT), Tesla (TSLA), Coca-Cola (KO), etc. — essentially any company listed on the NYSE or NASDAQ
- ETFs: VOO (S&P 500), VTI (total US market), QQQ (Nasdaq-100), BND (bond index), etc.
- ADRs: American Depositary Receipts, which are shares in foreign companies traded on US exchanges
You cannot buy options, futures, cryptocurrencies, or forex through Hatch — it's purely for shares and ETFs. This is fine for most investors but worth noting if you're interested in derivatives.
For Australian investors, popular Hatch purchases include:
- VOO (Vanguard S&P 500 ETF) — tracks the 500 largest US companies, excellent for passive investors
- VTI (Vanguard Total US Stock Market ETF) — tracks the entire US stock market, even broader than VOO
- QQQ (Invesco QQQ Trust) — technology-heavy, tracks the Nasdaq-100
- Tech stocks: Microsoft, Apple, Nvidia, Tesla — popular for growth-focused investors
- Dividend stocks: Johnson & Johnson, Procter & Gamble, Coca-Cola — popular for income-focused investors
Investment Strategy: How Australians Are Using Hatch
There are a few common ways Australian investors use Hatch:
Diversifying Beyond Australian Investments
Many Australian investors hold most of their portfolio in Australian stocks (often through the ASX) or Australian ETFs, but want US market exposure to diversify their risk. Hatch makes this simple — you can keep 30–50% of your portfolio in US stocks via Hatch and the rest in Australian investments. This reduces country-specific risk.
Dollar-Cost Averaging
Investors often set up a regular deposit schedule (e.g., $500 every month) and automatically invest in their chosen ETF or stock. This reduces the risk of "timing the market" and takes emotion out of investing. Because Hatch has no per-trade fees, making frequent small purchases doesn't cost you extra.
Long-Term Index Fund Investing
Many Australian investors simply buy VOO or VTI and hold it for 20+ years as part of their retirement strategy. With no brokerage fees per trade, buying fractional shares, and competitive FX rates, Hatch is an efficient vehicle for this approach.
Individual Stock Picking
Some investors enjoy researching and picking individual US stocks. Hatch supports this fully — you can buy Apple, Tesla, Microsoft, or any other US-listed stock. The fractional shares feature means you can build a diversified portfolio even with small amounts of capital.
Practical Example: Investing $5,000 on Hatch
Let's walk through a real scenario. You're an Australian investor with $5,000 to invest in US shares. Here's how it works on Hatch:
- You deposit $5,000 AUD from your bank account into Hatch
- Hatch charges 0.50% FX fee = $25. You now have $4,975 USD in your account
- You decide to buy VOO (Vanguard S&P 500 ETF), currently trading at $480 per share
- You can buy 10.36 shares of VOO with your $4,975 (no brokerage fee — the fractional share feature means you can own partial shares)
- You now own VOO, and it's tracked in real-time in your Hatch app. If the S&P 500 gains 10%, your VOO investment also gains 10% (minus any currency fluctuations)
- You receive a small dividend from VOO periodically (around 1.3% annually), which is subject to US withholding tax and Australian tax
- In 10 years, if the S&P 500 has returned 10% annually, your $4,975 investment has grown to approximately $12,900 (before currency and tax), minus the original $25 FX fee on entry and a future FX fee when you withdraw
The key insight: the $25 FX fee is a tiny one-time cost relative to the long-term growth of your investment.
Currency Risk and AUD-USD Exchange Rates
This is crucial to understand. Your Hatch investments are denominated in USD, but you're an Australian earning in AUD. If the AUD strengthens against the USD, your US investments appear to be worth less in AUD terms (even if the underlying stock price doesn't move). Conversely, if the AUD weakens, your US investments appear worth more in AUD.
For example: you buy $4,975 USD worth of VOO when the AUD/USD rate is 0.65. If the AUD strengthens to 0.70, your $4,975 USD is now equivalent to only $7,107 AUD (previously it