Who owns them and are they safe?
Hatch is an online investment platform brought to you by Kiwi Wealth. Kiwi Wealth is regulated and part of Kiwi Group Holdings Limited, which is owned by NZ Post, the NZ Super Fund, and ACC. The aim of Hatch is to give Kiwis straightforward and affordable access to the US share markets.
When you use Hatch, you get your own US brokerage account through their partner DriveWealth. DriveWealth has protections in place in the US through Securities Investor Protection Corporation (SIPC), which insures your account for up to $500,000 in the event DriveWealth falls into financial difficulty.
In terms of cyber and data security, Hatch undertakes ongoing security audits. All the information on Hatch is encrypted and they adhere to the latest security practices.
How Hatch works
When you sign up for an account, you can choose what you’d like to invest in with no minimum investment requirement. It takes about 30 seconds to join and once your account is set up, you can deposit money and start investing.
If you are not yet ready to invest, you have the option of setting up a watchlist so you can keep track of companies. Hatch also has a live chat so you can get help if you need it.
Hatch also has digital educational guides to help you to understand more about investing. You can learn about investing and monitor shares for as long as you like without paying for that service.
Once you are invested, your online account will show you how well your investments are performing.
What can you trade with Hatch?
Hatch provides access to the US share markets and the ability to buy and sell shares in over 2,900 companies and over 900 exchange traded funds, also known as ETFs, from well-known fund managers like Vanguard. You can also become a shareholder in over 250 ADRs. An ADR is an American depositary receipt that allows you to invest in foreign companies, so you can invest in businesses in China and India, for example. Alibaba is also listed as a company you can invest in if you have a Hatch account.
Kids accounts
Anyone under 18 can have a kids account. To set up a kids account, you must be their parent or legal guardian and you will need to provide evidence of this. You also need to have your own Hatch account before signing up for a kids account.
Once you have applied and provided ID details of the child, then the approval process is usually completed within a day. You can then view your account and the child’s account information once you log into your main adult account.
How are dividends handled?
All of the dividends that you receive through Hatch are paid out in USD straight into your Hatch account. You can choose to reinvest them by buying more shares, or to withdraw them whenever you like.
Fees
It is free to sign up and there are no ongoing subscription costs. There are some costs involved though which we have noted below.
Exchange fees
This exchange fee is 0.5%. When you deposit or withdraw money, Hatch automatically exchanges it from NZD to USD. This 0.5% fee is included in the exchange rate you see in Hatch. Hatch advises that if you deposit over $100k then they will provide special (cheaper) exchange rates.
Brokerage fees
This fee is a minimum of $3 USD to buy and sell shares. You’ll pay a flat fee of $3 USD for every order of up to 300 shares. However, if you buy more than 300 shares in one order, you’ll only have to pay $0.01 a share.
US tax
A one-off $1.50 USD fee is deducted from your first deposit to cover the set-up, and after that, a $0.50 fee is deducted from your account each year to sort your US taxes for you. Hatch also aims to simplify this by providing a guide so as to make the tax admin easy for you.
Kids account fee
With a kids account it’s $0.50 to buy or sell up to 50 shares, this is cheaper than an adult account.