Stockpile a Holiday Gift

Americans will spend more than $125 billion on gift cards this holiday season. Those cards will be redeemed for everything from electronics gear to clothing to dining out. But this year, there's a new kind of gift card - one that can be redeemed for shares of stock! It's an innovative gift card from a company called Stockpile. It allows the recipient to redeem the card for fractional shares in almost every major listed company - a perfect holiday gift for grandchildren.

Investing small amounts for children is not in itself a new idea. At (now a division of Capital One Investing) you can open an online account and buy small amounts of shares in most listed companies and ETFs, with no minimum amount and very low commissions. But Stockpile's gift card turns stock gifting into a new, more accessible process.

(Special note: Shares owned in custodial accounts for kids become theirs at the age of majority. And they can weigh heavily against the family in applications for college financial aid.)

Here are five things to know about how Stockpile stock gift cards work:

1. How to buy a card. Anyone can buy a Stockpile gift card at more than 2,500 stores nationwide, or online. Those retailers include Kmart, Toys "R" Us, Office Max, Giant Eagle and many more. You'll find the gift cards hanging on the rack in three denominations: $25, $50 or $100. If you purchase online at, you can gift as much as $1,000 per transaction, and they will send a gift message by email to the recipient along with a claim code. To buy the card, you don't need the recipient's social security number or birthdate.

2. The Cost. You simply use cash or your credit card to purchase the gift card at the register. The cost depends on the card denomination you choose. A $25 gift card costs a fee of $4.95, the $50 card has a $6.95 fee, and there is a $7.95 fee for a $100 gift card. But if you purchase online, using a credit card and entering the recipient's email address, the fee is just $1.99 per transaction up to $100 - and $1.99 plus 3 percent for gifts over $100 and up to $1,000.

3. Picking the Stocks to Gift. The great feature of this gift card is that although the buyer can specify which stock is gifted, the actual decision is up to the recipient! Each gift card carries a claim code that is activated when it is purchased. The recipient simply goes to where he or she can switch to a different stock (or even opt out for a traditional gift card that can be used in stores).

The amount of the card is translated into fractional shares of the chosen company, priced at the close of the market on the day the card is redeemed. And the recipient can even buy additional shares for a cost of 99 cents per transaction. There is no account maintenance fee, and no fee for redemption of the card.

4. Security. Each stock purchase is made in an immediately activated brokerage account that is protected by SIPC insurance --important since this investment account is designed to grow over the years, and because by securely logging into the account you can buy additional shares of almost any stock, as well as checking in for current account valuation.

5. Do It Yourself! These accounts are not limited to gifting. You can instantly create a brokerage account in your own name, by inputting your bank routing and account number. Then you can invest any dollar amount, with no limit, at a cost of 99 cents per transaction.

Entrepreneurs Dan Schatt and Avi Lele are enthusiastic about the opportunity to offer stock investing to everyone, but especially children. I agree completely, making this one of the best holiday gifts ever. And that's The Savage Truth.

testPromoTitleReplace testPromoDekReplace Join HuffPost Today! No thanks.