What Is Stake and How Does It Work?
Stake is an Australian fintech brokerage that launched in 2017 with a mission to democratise access to US stock markets for retail investors. Based in Melbourne, the platform has grown rapidly and now serves hundreds of thousands of Australian investors. At its core, Stake is a straightforward platform: it's a mobile app (with web access) that allows you to buy and sell individual US stocks, ETFs, and fractional shares on the NYSE and NASDAQ exchanges.
The key thing to understand is how Stake's ownership structure works. When you buy a US stock through Stake, your shares are held in a brokerage account at DriveWealth LLC, a US-regulated broker that's licenced by the SEC (Securities and Exchange Commission). This is important because it means you own the shares directly — you're not buying a derivative or a fund that tracks the stock. Your DriveWealth account is in your name, which provides genuine ownership and voting rights (though voting is rarely exercised by Australian retail investors).
Stake offers fractional share ownership, which is a game-changer for Australian investors. Rather than needing AUD$2,000+ to buy one share in Tesla or Apple, you can invest as little as $1 and own a fraction of that share. This democratises access to expensive US blue-chip stocks and makes it easy to diversify even with a modest portfolio.
The app itself is clean and user-friendly. You can set up an account in minutes, fund it via bank transfer, and start trading. Stake supports recurring investments (called 'Stake Invest'), which lets you set up automatic weekly or monthly purchases of specific stocks — a practical feature for dollar-cost averaging into US companies.
Platform Features and Functionality
Stake's platform includes real-time pricing, watchlists, performance tracking, and basic research tools. The app integrates with your Australian bank account for deposits and withdrawals, making the funding process seamless. Orders settle in 2–3 business days (T+2 settlement), which is standard for US markets.
One standout feature is the Stake Referral program, which rewards you (and your friends) with free US fractional shares for signing up. As of 2025, successful referrals can earn you AUD$10–$20 worth of free US stocks, depending on promotion cycles.
Stake Fees: Zero Brokerage and the AUD/USD Exchange Rate
Stake's fee structure is simple but requires careful understanding, especially around currency conversion. Let's break it down.
Zero Brokerage on US Stocks
Stake charges zero dollars in brokerage commissions when you buy or sell US stocks or US-listed ETFs. This is genuinely competitive and puts it ahead of many traditional Australian brokers. For comparison, Interactive Brokers charges AUD$9.82 per trade (or USD$6.50 for US users), and SelfWealth charges a flat AUD$9.50 per trade for ASX stocks. For US stocks, Stake's zero brokerage is a significant advantage, especially if you're an active trader or regularly buying stocks.
The AUD/USD Spread: The Hidden Cost
Here's where Stake makes its money and where Australian investors need to pay close attention. When you deposit AUD into your Stake account to purchase US stocks, Stake converts your Australian dollars to US dollars. That conversion comes with a spread — typically around 0.70% on top of the current exchange rate.
Let's work through a real example. Suppose the mid-market AUD/USD rate is 0.65 (meaning 1 AUD = 0.65 USD). A 0.70% spread means Stake's actual conversion rate is approximately 0.6455 USD per AUD. If you deposit AUD$1,000:
- At mid-market (0.65): you'd get USD$650
- At Stake's rate (0.6455): you actually get USD$645.50
- Cost of the spread: AUD$4.50 (roughly 0.70% of your deposit)
Over a year of regular investing, that spread can add up. It's not enormous, but it's material — especially if you're making weekly deposits. This is why Stake offers the premium 'Stake Black' subscription.
Stake Black: Is the Premium Worth It?
Stake Black costs AUD$9 per month (or AUD$90 per year if you pay annually, which saves you AUD$18). Benefits include:
- Reduced FX spread: Typically 0.40% instead of 0.70% — a 0.30% saving on every AUD/USD conversion
- Priority customer support
- Early access to new features
For most Australian investors, Stake Black makes sense if you're investing regularly. If you deposit AUD$500 weekly (AUD$26,000 per year), the difference between a 0.70% spread and a 0.40% spread is roughly AUD$78 per year. Stake Black costs AUD$90, so you'd break even after about a year of consistent investing. If you deposit larger amounts or are more active, the premium definitely pays for itself.
ASX Stocks: A Flat $3 Brokerage
If you want to use Stake to buy Australian ASX-listed stocks, there's a flat AUD$3 brokerage fee per trade. This is cheaper than SelfWealth (AUD$9.50) but more expensive than Pearler (which offers zero brokerage on ETFs). Given this, Stake isn't the best choice for ASX investing — but it's a nice secondary feature if you want everything in one app.
Other Fees to Consider
Stake does not charge:
- Account opening or maintenance fees
- Deposit or withdrawal fees (via bank transfer)
- Inactivity fees
- Dividend collection fees
This transparency is refreshing and is a major reason Stake appeals to Australian investors. However, always check the Stake website for the most current fee information, as fintech platforms frequently adjust their pricing.
How to Get Started: A Step-by-Step Guide
Account Setup
Opening a Stake account takes about 5 minutes. You'll need:
- A valid Australian phone number
- An email address
- An Australian residential address
- Your tax file number (TFN) for Australian tax reporting
- A valid form of ID (driver's licence or passport)
Stake uses digital identity verification, so you won't need to post documents. Once verified, you can link your Australian bank account and make your first deposit immediately.
Making Your First Deposit
Deposits are processed via bank transfer (BPAY is not available). The money typically arrives in your Stake account within 1–2 business days. There's no minimum deposit amount, so you can start with as little as AUD$20 if you want to test the platform.
Your First Trade
Once your AUD is in your Stake account, you can immediately buy US stocks or fractional shares. Simply search for a stock (using the ticker symbol, e.g., "AAPL" for Apple), decide on a dollar amount, and buy. If you're new to US stocks, Stake's in-app research tools provide company overviews, charts, and recent news.
Tax Implications for Australians Using Stake
This is critical: investing in US stocks via Stake has real tax implications that many Australian investors overlook. Here's what you need to know.
US Dividend Withholding Tax
When US companies pay dividends to foreign shareholders, the US imposes a withholding tax. Historically, this was 30%, but thanks to the US-Australia tax treaty (in force since 1953 and updated in 2001), Australian investors benefit from a reduced rate of 15%.
For example, if you own AUD$10,000 worth of Microsoft shares and receive a USD$50 dividend, the US will withhold USD$7.50 (15% of USD$50) before the cash reaches your account. This is automatic — Stake handles it.
The good news: you can usually claim a foreign tax credit with the ATO, offsetting some Australian tax liability on that income. However, this requires proper record-keeping and often the help of a tax agent.
Capital Gains Tax (CGT)
When you sell a US stock at a profit, that gain is subject to Australian capital gains tax. The ATO treats profits from selling US shares exactly as it treats profits from selling Australian stocks. If you held the shares for 12+ months before selling, you get the CGT discount (50% of the gain is counted as assessable income for most taxpayers).
Example: You buy USD$1,000 worth of Tesla stock and sell it for USD$1,300 one year later, making a USD$300 gain. When that USD$300 is converted back to AUD (say, at $500 AUD), you have a AUD$500 capital gain. With the CGT discount, only AUD$250 of that is counted as assessable income, reducing your tax bill significantly.
Foreign Exchange (FX) Gains and Losses
This is where many Australian investors trip up. Your US shares are denominated in USD, so if the AUD strengthens against the USD, you have an FX loss (you have fewer AUD when you convert back). Conversely, AUD weakness means an FX gain.
The ATO treats currency fluctuations as either capital gains or ordinary income depending on your circumstances. If you're a casual investor, FX movements are generally treated as capital gains. If you're a professional trader, they might be ordinary income.
For most Australian retail investors, this is straightforward: the ATO simply expects you to report the AUD value of your US shareholding in your tax return, and FX movements are accounted for naturally.
Stake's Tax Reporting
Stake provides annual tax documents (a form confirming dividends received, withholding taxes paid, etc.) by the end of June each year. This is helpful but not comprehensive — it doesn't calculate your capital gains or FX impacts. Many Australian investors find it worthwhile to work with a tax agent who specialises in US investment taxation, especially if you're holding a large portfolio or trading frequently. Budget AUD$300–$600 for professional tax advice if you need it.
Stake vs. Other Platforms: How Does It Compare?
Stake vs. Hatch
Hatch is another popular NZ-owned fintech serving Australian investors. Both offer zero brokerage on US stocks and similar user-friendly apps. The main difference: Hatch's FX spread is typically 0.75% (slightly worse than Stake's 0.70%), but Hatch doesn't offer a premium membership to reduce it. For regular investors, Stake is the better deal. Read our full Hatch review for a detailed comparison.
Stake vs. Interactive Brokers (IBKR)
Interactive Brokers is the professional-grade option. IBKR charges commissions (around USD$1 per trade, or AUD$1.50), but its FX spreads are tighter (around 0.2%), and it offers access to options, futures, bonds, and international exchanges beyond just US stocks. IBKR is also significantly more complex — its interface is designed for active traders, not beginners.
For most Australian retail investors: Stake wins on simplicity and cost-effectiveness. IBKR is better for active traders or those needing advanced features.
Stake vs. ASX-Focused Platforms (Pearler, SelfWealth)
Pearler and SelfWealth are Australian platforms designed primarily for ASX stocks and ETFs. Pearler offers zero brokerage on ASX ETFs; SelfWealth charges a flat AUD$9.50. Neither platform offers direct US stock access — instead, they offer ASX-listed ETFs that track US indices (e.g., VAS tracks US stocks).
For ASX investing: Pearler and SelfWealth are better. For direct US stock access, Stake wins.
Security, Regulation, and Safety
A natural question: is my money safe on Stake? Here's what you need to know.
Regulatory Framework
Stake is an Australian-licensed financial services provider (AFSL #520633) regulated by the Australian Securities and Investments Commission (ASIC). Your holdings in US stocks are actually held at DriveWealth LLC, a US-regulated broker under SEC oversight.
This two-layer regulation is actually reassuring. Stake can't disappear with your money because it's an Australian FSP, and your US shares are held separately at a US-regulated entity.
Account Security
Stake uses industry-standard encryption, two-factor authentication (2FA), and biometric login (fingerprint/face ID on mobile). These are standard safeguards at reputable fintech brokers.
Investor Protections
Australian investors using Stake are covered by ASIC's product disclosure requirements and Australian Consumer Law. Your US stocks held at DriveWealth are also protected by US Securities Investor Protection Corporation (SIPC) insurance up to USD$500,000 per account — one of the world's strongest investor protections.
In practical terms: if Stake collapses or DriveWealth goes under, your shares are protected and can be transferred to another broker. This is stronger protection than most Australian investors realise.
Real-World Examples: What Australian Investors Are Doing with Stake
Example 1: The Consistent Dollar-Cost Averager
Sarah, a 28-year-old Melbourne accountant, invests AUD$200 every fortnight into a mix of US dividend stocks and ETFs via Stake. Over two years, she's invested AUD$5,200. Her portfolio has grown to approximately AUD$6,100 (including capital gains and reinvested dividends), and she pays no brokerage commissions. Her annual tax bill includes AUD$45 in US dividend withholding tax (claimed as a foreign tax credit). Stake Black makes sense for her, saving her roughly AUD$200 per year in FX spreads.
Example 2: The Long-Term Index Investor
Marcus, a 45-year-old Perth engineer, uses Stake to hold USD$50,000 (approximately AUD$77,000) in the Vanguard S&P 500 ETF (VOO), a US-domiciled fund that tracks the S&P 500 index. He bought fractional shares over three years and now receives quarterly dividends. His primary investment is still in Australian superannuation, but Stake gives him additional US exposure outside super. He pays minimal tax because he's not actively trading; dividends are low compared to capital gains (which he hasn't realised).
Example 3: The Active Tech Investor
Emma, a 32-year-old Sydney software developer, uses Stake to build a concentrated portfolio of 8–10 US tech stocks (Microsoft, Apple, Nvidia, etc.). She trades roughly once per week, investing new capital and occasionally rebalancing. She's activated Stake Black (AUD$90/year) because her regular deposits (AUD$800/week) make the FX spread reduction worthwhile. Over 18 months, Stake Black has saved her approximately AUD$500 in FX costs — well worth the subscription.