Kuda Invest: Invest in US Stocks from Your Naira Account

by Studo
February 17, 2024

Kuda Invest is a feature within the Kuda app in Nigeria that allows you to invest in fractional shares of US stocks directly from your naira account. This means you can start small and buy portions of popular companies, instead of needing a large sum to purchase a whole share.

Here are some of Kuda Invest’s key features:

• Fractional shares:Invest in any US stock,even if it trades for thousands of dollars,with as little as $20.

• Easy to use:Manage your investments directly within the familiar Kuda app.

• No hidden fees:Transparent pricing with a single commission fee per trade.

• Live data:Get real-time stock prices and track your portfolio performance.

• Wide range of stocks:Choose from hundreds of popular US companies across various sectors.

• Security:Your funds are held securely at a licensed custodian bank.

Benefits of Investing Through Kuda

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1. Fractional Shares:

• Invest with any amount:Instead of needing full share prices,buy portions of popular US stocks with Naira,making investing accessible to everyone.

• Start small and scale up:Begin with a comfortable amount and gradually build your portfolio over time.

• Diversify easily:Spread your investment across different companies without needing large sums for each.

2. Ease of Use:

• Invest directly from your Kuda app:No need to open separate accounts or navigate complex platforms.

• Intuitive interface:Simple and user-friendly design makes investing accessible to beginners.

• Minimal paperwork:Streamlined process for opening an account and making investments.

3. Additional Benefits:

• No account maintenance fees:Save money on unnecessary charges often associated with traditional brokerage accounts.

• Free real-time stock prices:Stay informed and make informed decisions with up-to-date information.

• Potential dividend income:Earn passive income from eligible stocks held in your portfolio.

• Customer support:Access help and guidance from Kuda’s dedicated support team.

Remember: While Kuda Invest offers advantages, investing always carries risks. Conduct thorough research and understand your risk tolerance before making any investment decisions.

Risks involved in stock market investing

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• Market risk:Stock prices can fluctuate significantly,potentially leading to losses.This risk applies to all stocks and cannot be completely eliminated.

• Individual stock risk:Companies can experience financial difficulties or even go bankrupt,resulting in complete loss of your investment.Diversification can help mitigate this risk.

• Liquidity risk:Some stocks may be less liquid,making it difficult to sell them quickly when needed.

• Inflation risk:Over time,inflation can erode the purchasing power of your returns.

• Currency risk:Investing in international stocks exposes you to fluctuations in exchange rates.

• Fees and commissions:Transaction fees and other charges can eat into your returns.

Eligibility Criteria for Kuda Invest

To open a Kuda Invest account, you must meet the following criteria:

Basic Account:

• Be a resident of Nigeria.

• Be at least 18 years old.

• Have a valid Nigerian Bank Verification Number (BVN).

• Have a verified Kuda personal account (Tier 3 – upgraded with BVN and ID).

Additional Information:

• While not explicitly mentioned as a requirement,it’s likely you’ll also need a smartphone with the Kuda app installed.

• Kuda Invest is currently in its early stages,so eligibility criteria may evolve over time.

• Certain investment restrictions may apply based on your individual circ*mstances.

• It’s important to note that Kuda Invest does not currently accept US residents or international users.

For further information:

• Refer to Kuda’s official Invest page:

• Consult Kuda’s Help Center:

Guide to Kuda Invest Account Creation

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Before you start:

• Ensure you have the latest Kuda app downloaded and installed.

• You’ll need your Bank Verification Number (BVN) and a valid ID ready.

• Meet the eligibility criteria:be 18+ years old and a resident of Nigeria.

Steps:

• Open the Kuda app and log in.

Fractional Shares: Owning a Piece of the Pie, Even Without the Whole Dough

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Imagine wanting to invest in a company like Tesla, but its share price sits at a cool $200. With limited funds, buying a whole share feels out of reach. That’s where fractional shares come in, allowing you to invest in portions of a share, making expensive stocks more accessible!

How they work:

• Think of a full share as a complete pizza.Fractional shares let you buy aslice(0.5,0.25,etc.) instead of the whole pie.

• When you invest in a fractional share,you own aproportionof the underlying company,just like with a full share.

• Kuda Invest,for example,allows you to purchaseany amountin dollars,and they automatically convert it to the corresponding fractional share.

Advantages of Fractional Shares:

• Invest in high-priced stocks:No longer limited by expensive share prices.Open the door to companies you previously couldn’t afford.

• Start small and build gradually:Invest with any amount,allowing you to dip your toes in the investing pool without a significant upfront cost.

• Dollar-cost averaging:Invest smaller amounts consistently,potentially reducing the impact of market volatility on your average cost per share.

• Greater diversification:Invest in a wider range of companies with smaller amounts,spreading your risk and potentially improving your portfolio’s performance.

• Fractional dividends:Even with a fraction of a share,you still receive a proportional share of any dividends the company pays.

Remember:

• Fractional shares might not be available for all stocks or investment platforms.

• Some platforms might charge fees for buying or selling fractional shares.

• While fractional shares offer advantages,investing always carries inherent risks.Do your research before investing.

Overall, fractional shares offer a valuable tool for individuals starting their investment journey or looking to diversify their portfolios with limited capital. They break down barriers to entry, empowering you to own a piece of the companies you believe in, even without the full dough!

Basic Stock Market Terminology for Kuda Invest:

Stock: A security representing ownership in a company. Owning a stock gives you a claim on the company’s profits and assets. On Kuda Invest, you can buy fractional shares, meaning you don’t need to buy an entire stock.

Share: The smallest unit of ownership in a company. When you buy a stock, you’re buying a specific number of shares.

Market cap (market capitalization): The total value of all a company’s outstanding shares, calculated by multiplying the share price by the number of shares outstanding. A higher market cap generally indicates a larger and more established company.

Other useful terms:

• Bid:The highest price a buyer is willing to pay for a stock.

• Ask:The lowest price a seller is willing to accept for a stock.

• Order:An instruction to buy or sell a stock at a specific price or within certain parameters.

• Portfolio:The collection of all your investments.

• Dividend:A payment made by a company to its shareholders from its profits.

Finding and Researching Stocks on Kuda Invest:

1. Browsing by Industry:

• Kuda Invest categorizes stocks by industry (e.g.,technology,finance,healthcare).Use this feature to explore companies operating in sectors that interest you.

2. Searching by ticker symbol or company name:

• For specific stocks in mind,use the search bar to find them by ticker symbol (e.g.,AAPL for Apple) or company name.

3. Analyzing Individual Stocks:

• Once you find a stock,Kuda Invest displays:

Placing a Buy Order on Kuda Invest

Placing a buy order on Kuda Invest involves choosing a stock and specifying the amount and order type. Here’s a breakdown:

1. Choosing a Stock:

• Browse through the available stocks or search for specific companies using the search bar.

• Review the stock’s information like current price,market cap,and historical performance.

• Remember,do your own researchbefore investing in any stock.

2. Specifying the Amount:

• Since Kuda Invest allows fractional shares,you can invest any amount,not just whole shares.

• Enter the desired investment amount (e.g.,N1000) or the number of shares you want to buy (e.g.,0.5 shares).

• Kuda will display the estimated total cost based on the current market price.

3. Choosing the Order Type:

Kuda Invest offers two main order types:

• Market Order:This order executes immediately at the best available market price.It’s simple but might not guarantee a specific price,especially in volatile markets.

• Limit Order:This order gets executed only if the stock price reaches your specified limit price or lower.It offers more control over the purchase price but might not get filled if the price never reaches your limit.

Additional Notes:

• Kuda might have minimum investment amounts per stock.Check the specific details within the app.

• Review any applicable fees before placing your order.

• Once you confirm the order details,Kuda will deduct the funds from your investment balance and execute the order based on your chosen type.

Tip: For beginners, starting with market orders might be simpler, but consider limit orders when aiming for specific price points.

Minimum Investment Amounts and Relevant Fees for Kuda Invest

Minimum Investment:

• $20:This is the minimum amount you need to deposit into your Kuda Invest account to start investing.

• $10:This is the minimum amount you can buy or sell of any individual stock.This allows you to invest in fractional shares,meaning you don’t need to buy an entire share of a high-priced stock.

Fees:

• Trading Fee:Kuda charges a1% trading feeon each buy and sell order.This means if you buy or sell $100 worth of stock,you’ll pay a $1 fee.

• Management Fee:There is currentlyno management feecharged on your Kuda Invest account.

• Foreign Exchange Fee:When depositing or withdrawing funds from your Kuda Invest account,you may be charged aforeign exchange fee.This fee depends on the current exchange rate and your bank’s policies.

• Other Fees:It’s important to note that there may be other fees associated with specific investments,such as dividend reinvestment fees or inactivity fees.Make sure to check the specific details of your chosen investment before committing.

Important Notes:

• These fees are subject to change,so always check Kuda Invest’s website or app for the latest information.

• Remember that the 1% trading fee can add up over time,especially for smaller investments.Consider the fees when making your investment decisions.

• There are other investment platforms in Nigeria with different fee structures.Do your research and compare fees before choosing a platform.

Additional Tips:

• Start small and gradually increase your investment amounts as you get comfortable with the process.

• Focus on building a diversified portfolio to spread your risk and reduce the impact of market fluctuations.

• Don’t chase quick returns and invest for the long term.

By understanding the minimum investment amounts and fees associated with Kuda Invest, you can make informed decisions about your investments and avoid unnecessary surprises. Remember, responsible investing involves careful research and understanding the risks involved.

Viewing your Portfolio Performance

• Open the Kuda app and navigate to the Invest section.This is where you manage your investments.

• Look for a “Portfolio” or “Performance” tab.This section should provide an overview of your overall portfolio’s performance.

• Expect to see metrics like:

• Total portfolio value:This shows the current market value of all your holdings combined.

• Change in value:This indicates how much your portfolio has gained or lost since its inception or a specific period.

• Percentage change:This expresses the change in value as a percentage.

• Returns:This might show overall returns for different timeframes (e.g.,daily,weekly,monthly).

• Some apps offer charts and graphsto visualize your portfolio’s performance over time.

Individual Stock Holdings:

• Look for a “Holdings” or “Positions” tab.This section should list all the individual stocks you own.

• Expect to see information for each stock, like:

• Stock symbol and name:Identifies the company you’re invested in.

• Number of shares held:Shows how many shares you own.

• Current share price:Reflects the market value of one share.

• Total value of your holding:Calculates the total worth of your shares in that company.

• Change in value and percentage change:Similar to portfolio level,shows individual stock performance.

• Some apps allow you to view additional detailslike recent news,charts,and historical performance for each stock.

Additional Notes:

• The specific layout and information displayed might vary slightly depending on the Kuda Invest app version.

• Kuda Invest is still under development,so features and functionalities might change in the future.

Frequently Asked Questions about Kuda Invest

General:

• Who is eligible to use Kuda Invest?You must be a Nigerian resident with a verified Kuda account and be at least 18 years old.

• What types of investments can I make on Kuda Invest?Currently,you can only invest in fractional shares of US stocks.

• What are the fees associated with Kuda Invest?Kuda charges a small commission on each trade and a custody fee to hold your securities.You can find more details on their website.

• Is Kuda Invest safe?Kuda is a licensed financial institution and takes security seriously.However,all investments carry some risk,so it’s important to understand the risks involved before investing.

Using Kuda Invest:

• How do I open a Kuda Invest account?You can open an account directly within the Kuda app.You will need to verify your identity and provide some basic information.

• How do I find and research stocks on Kuda Invest?The app provides basic information about each stock,but you should always do your own research before investing.

• How do I place a buy order?You can specify the amount you want to invest and choose the order type (e.g.,market order,limit order).

• How do I view my portfolio performance and individual stock holdings?You can access this information within the “Portfolio” or “Holdings” section of the app.

• How do I sell my shares?You can place a sell order within the app,specifying the number of shares you want to sell and the order type.

Investment Specific:

• What are fractional shares?Fractional shares allow you to buy a portion of a single share of a stock,even if the full share price is expensive.

• Can I reinvest my dividends automatically?No,Kuda Invest does not currently offer automatic dividend reinvestment.You will receive the cash directly into your account.

• What are the tax implications of investing with Kuda Invest?It’s important to consult with a tax advisor to understand the specific tax implications for your situation.

Additional Resources:

• Kuda Invest Help Center:

• Kuda Invest website:

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please do your own research before making any investment decisions.

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