Investing vs. Saving for Retirement. Which is Right For You?

By: Team Stash

Published: Jul 05, 2018

•  Updated: Jun 18, 2026

Helping you to save money and invest are two core goals at Stash. We think that both are essential to increasing your financial stability and independence.

That’s why Stash offers two types of accounts, one for investing and one for retirement accounts.

Read on to find out which one is right for you.

Here’s what they have in common

Both accounts will let you choose from thousands of single stocks and dozens of low-cost ETFs. The stocks include a wide variety of some of the biggest blue chip, consumer, or tech-focused companies around, as well as new companies that have only recently had public offerings.

Both allow you to buy what’s known as fractional shares.

What’s a fractional share?

Often the share price of a stock or fund can be high—hundreds or even thousands of dollars. We let you buy a portion of these shares, at a price you can afford. Your investment still works the same way as if you were buying full share amounts.

Here’s a breakdown of investing vs. saving for retirement with Stash:

Investing with Stash

Get your feet wet in the investment world with Stash. Stash lets you invest in Exchange Traded Funds (ETFs), or individual stocks of some of the most prominent publicly traded companies around.

You can fund your account with any dollar amount.

Investing is for medium to long-term savings goals. Since you’ll be investing the money, it shouldn’t be for short-term needs. (An emergency fund is probably best for that.)

Here are some other things to keep in mind about investing with Stash:

• You can withdraw your money from your account at any time.
• Unlike the retirement accounts that Stash offers, the regular investment account is subject to capital gains taxes on your earnings each year. Find out more about capital gains taxes here.
• There is no limit on how much you put into your investment account annually.
• You’ll get an investment account¹ when you sign up for Stash.²

Saving for retirement with Stash

Retirement will be here before you know it. And the best time to start preparing for it is by saving now. It may be 20, 30, even 40 years away. Opening a retirement account³ with Stash could help you meet this long-term goal.

Stash lets you start saving for retirement with $5.

Once you’ve funded your account, you’ll have access to the same funds and stocks as you do with an investment account.

Here’s what’s different:

• You’ll have a choice between two different accounts. One is called a traditional individual retirement account (IRA). The other is called a Roth IRA.
• You fund a traditional IRA using pre-tax dollars, which could lower your tax rate. Earnings grow tax-free until retirement.
• In contrast, a Roth is funded with after-tax dollars. Like a traditional IRA, however, once you’ve funded the account, your earnings grow tax-free.
• If you withdraw money from a retirement account before age 59½, you’ll owe taxes and a penalty.
• You’ll get a retirement account if you sign up for the Stash plan.

Investing vs keeping money in your savings account

Think of your investment and retirement accounts as places where you can put your savings to work.

If your money just sits in a typical bank account, it’s not going to earn much interest. In contrast, investment and retirement accounts can benefit from something called compounding.

Compounding is when the interest or earnings your principal makes also earns interest or earnings, which can dramatically increase your rate of savings.

All investing carries risk, and it’s important to know that you can also lose money with your investments.

Written by

Team Stash

We want to turn money into a source of hope and opportunity. We teach people how to build good habits, save more and make it easy and affordable to get started investing. So far, we’ve helped over 6 million people create a more secure financial future with our expert advice and award winning investing app.