Brokers Offering Fractional Shares

Investing in the stock market has traditionally required purchasing whole shares of a company’s stock. However, with the rise of fractional share investing, investors now have the opportunity to own a portion of a share, making it more accessible for those with limited funds. Several brokers now offer fractional shares, allowing investors to diversify their portfolios without breaking the bank.

What are Fractional Shares?

Fractional shares are exactly what they sound like – a fraction of a whole share of a company’s stock. For example, if a share of a company’s stock is trading at $100, and you only have $50 to invest, you can purchase half a share, or 0.5 shares. This allows investors to invest in high-priced stocks without having to buy a full share.

Benefits of Fractional Shares

• Diversification: Fractional shares allow investors to diversify their portfolios by investing in multiple companies, even if they have limited funds.
• Cost-effective: Investors can invest in high-priced stocks without having to buy a full share, making it more affordable.
• Reinvestment: Dividends earned on fractional shares can be reinvested, allowing for compound growth over time.

Brokers Offering Fractional Shares

Several brokers now offer fractional share investing, making it easier for investors to access this type of investment. Some of the top brokers offering fractional shares include:

1. Robinhood

Robinhood was one of the first brokers to offer fractional share investing, allowing investors to purchase as little as $1 worth of a stock. They do not charge any commission fees for buying or selling fractional shares.

2. Fidelity

Fidelity offers fractional share investing through their Fidelity Mobile App, allowing investors to buy and sell fractions of shares of select stocks and ETFs. They do not charge any commission fees for fractional share transactions.

3. Charles Schwab

Charles Schwab offers fractional share investing through their Schwab Stock Slices program, which allows investors to purchase as little as $5 worth of a stock. They do not charge any commission fees for buying or selling fractional shares.

Conclusion

Fractional share investing has opened up new opportunities for investors to diversify their portfolios and invest in high-priced stocks without breaking the bank. With several brokers now offering fractional shares, it has never been easier to get started with this type of investing.