A new type of gift is available this holiday season that may get youngsters interested in investing early.

A new type of gift is available this holiday season, and may get youngsters interested in investing early.

It’s nearly Halloween, and that means that the winter holidays are just around the corner! For any gift-giving occasions, secular or spiritual, a couple of new services let you buy and give the gift that keeps on giving: fractional shares of stock.*

*Gifts of stock are not guaranteed to keep on giving. 

How much can I buy?

To buy the gift, neither the buyer nor the recipient needs a brokerage account. But to claim the shares, the giftee will need to establish an account. For minors, that means a parent or other adult will need to set up a custodial account.

There are currently 2 businesses competing in this gift stock arena — SparkGift and Stockpile. The services are similar, but with a couple of differences.

For instance, both services let you buy fractional shares of stock.

Stockpile lets you buy as little as $1 worth of stock if you use the website, but gift cards in larger denominations are sold in some retail outlets.

“You can also do this online. Enter the email address of the recipient, select any amount between $1 and $1,000 and it gets sent,” says Dan Schatt, chief commercial officer at Stockpile.

“We made the process of giving someone stock as easy as checking out on Amazon,” he quips.

SparkGift allows purchases between $20 and $2,000.

Both services let investors buy shares of indexes through exchange-traded funds, or ETFs, in addition to stocks.

Buying fractional shares

Unlike buying stock in a regular account, these gifts are sold in fractional shares. Each company buys shares a little differently, but essentially investors are not assured of getting a specific price.

At Stockpile, orders received before 3 p.m. Eastern Time will get the closing price for the day. Orders placed after 3 p.m. get the next day’s closing price.

SparkGift buys shares in the middle of the day — “between 11 a.m. and 2 p.m., and they get the trading price during that window,” says Peggy Mangot, CEO of SparkGift.

Brokerage options

Stockpile funnels stockholders into its own brokerage option. Once the account is established, the account owner can put more money into the account via cash transfer from a bank and make trades for 99 cents.

At SparkGift, the account is established with Folio Institutional. Though SparkGift hasn’t yet set up the feature, the ability to transfer money from a bank account will be added in the future. For now, the only way to add money is through the gift process.

“The only fees charged are the gift service fee of $2.95 plus 3% of the gift value,” says Mangot.

SparkGift has no trading fee.

“And the reason we don’t is the customers that would use our product are buy-and-hold customers,” says Mangot.

It seems like giving stock would be a great way to teach kids about saving and investing for the future. Would you like to give or receive the gift of stock?

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Senior investing reporter Sheyna Steiner is a co-author of “Future Millionaires’ Guidebook,” an e-book written by Bankrate editors and reporters. It’s available at all the major e-book retailers.