What are fractional shares?

Fractional shares enable investors to own a percentage of a share of company stock. With fractional shares, investors and traders are not required to purchase at least one share in order to invest in a company. As an example, let’s say you’ve decided to invest in Berkshire Hathaway Inc. (NYSE: BRK.B), which was priced at around $441.60, as of mid-August 2024. Maybe the price tag on that stock is simply too steep for you; not all traders can afford to pay over $400 for one share. With fractional shares, you can still invest in BRK.B by purchasing a percentage of one share. For example, if you decided that you could afford to invest $100, you could purchase 22.65% of one share at that price.

Are fractional shares worth it?

Yes, fractional shares can be worth it for investors and stock traders of all experience levels. Here are three reasons that fractional shares can have a place in any investor’s portfolio: Flexible investment: Fractional shares let you invest according to your budget. Investors can diversify a portfolio by buying multiple stocks without the budget requirements that would be necessary for buying full shares of each stock. Customizable portfolios: With fractional shares, you can create a personalized basket of stocks, similar to an ETF , tailored to your investment strategy. This customization can include specific allocations. For example, you might want to set a target weight of 12% for a given stock to allocate from your trading balance; you can purchase fractional shares to hit the exact 12% portfolio allocation. Convenience for all investors: Fractional shares aren't just for those on a tight budget. Even seasoned investors with substantial portfolios can benefit by making precise allocations without needing to round up to the nearest whole share.

Do fractional shares pay dividends?

Yes, in most cases you will earn fractional dividends if you own fractional shares (but it’s best to check with your broker to make sure). Your dividend will be proportional to the number of fractions of a share that you own.

Can you buy fractional shares of ETFs?

Yes, you can buy fractional shares of ETFs (Exchange-Traded Funds), making it easier than ever to invest in the stock market – regardless of your trading budget. This flexibility allows you to allocate any dollar amount toward your investment strategy, whether you're pursuing a passive approach with ETFs or engaging in more active trading. For example, consider the Vanguard 500 Index Fund ETF (VOO), which aims to replicate the performance of the S&P 500 Index. At the time of this writing, VOO is priced at approximately $508.87. If you wanted to invest $250 per week in this ETF, you could set up a recurring purchase to either allocate that exact dollar amount using fractional shares. Investing a fixed dollar amount instead of a specific fractional share can be a more consistent approach, especially given the fluctuations in ETF prices. This method allows you to buy into the ETF over time without worrying about the exact share price on the day of your purchase.

How do you buy a fractional share?

On most major platforms, buying a fraction of a share is no different than buying a whole share. In most cases, you’ll simply specify two extra decimals (or more if supported) to any whole number or zero (i.e., you might decide to buy 1.34 shares of a company stock). This is done in the order window before submitting your order for execution with a broker that supports fractional shares. For example, on Fidelity ’s web platform, you can either specify the dollar amount you wish to invest or the number of shares you want to buy. If you choose the dollar amount, the platform will automatically calculate the corresponding fractional share based on the current price of the stock. This flexibility makes it easy to invest exactly how much you want. Here’s a step-by-step breakdown of the buying process: Choose a broker: First, ensure that your online stock broker supports fractional shares. Some of the best stock brokers, like Fidelity , Schwab , and Interactive Brokers offer the ability to buy fractional shares. Log in: Access your brokerage account using your credentials. Select the stock: Find the stock you want to buy. For example, you might search for “TSLA” for Tesla. Enter your order: Click on the option to buy shares of the selected stock. This will bring you to the order entry screen. You’ll need to specify the fraction of shares you want to buy, typically in decimals (e.g., 0.1 for a tenth of a share). You can also just enter the dollar amount you wish to invest. Most platforms will provide a real-time share percentage calculation based on the dollar amount. Review and submit your order: Once you’ve reviewed the order details, click on the “Buy” or “Submit” button to execute the trade. Your fractional shares will be added to your portfolio.

What brokers offer fractional shares?

Based on our hands-on testing, here is our full list of brokers that offer fractional shares in 2024 (in alphabetical order): Charles Schwab eToro Fidelity Firstrade Interactive Brokers J.P. Morgan Self-Directed Investing Public.com Robinhood SoFi Invest tastytrade Webull Wellstrade

Best Brokers for Fractional Shares

Written by Steven Hatzakis
Fact-checked by Joey Shadeck
Edited by John Bringans

October 17, 2024

Steven Hatzakis has been reviewing brokers for nearly ten years and has 25+ years of experience as a trader. His reviews are unbiased and independent, and his expertise is sought after for conferences and speaking events around the world. Learn more.

Fractional shares make it possible for investors and traders to own less than one share of stock in a company. This may not seem like a big deal, but the ability to own fractions of a stock unlocks new possibilities for trading strategies and investment methodologies.

Remember, fractional shares aren’t just for budget investors; investors with multi-million dollar portfolios might decide to take advantage of fractional shares (I’ll get into this more later). In this guide, I’ll dive into the world of fractional shares, go over the pros and cons of trading fractional shares, and I’ll reveal my picks for the best fractional shares brokers in 2024.

Best Brokers for Fractional Shares

The StockBrokers.com review process includes hands-on testing, robust fact-checking, and over 3,000 hand-collected data points; here are the best fractional shares brokers for 2024: