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Fractional shares allow investors to purchase a stock or ETF with almost any amount of money, which means you don’t have to wait until you can afford to buy a full share of a high-priced bellwether stock like Alphabet and Amazon to add it to your portfolio.
The ability to buy fractional shares is attractive, especially for investors just starting out and those with more modest budgets. Plus, it makes it much easier to use dollar-cost averaging.
These online stock brokers allow fractional shares to be traded. Here’s what you need to know.
In the past, fractional investing was offered by some brokers indirectly via dividend reinvestment plans (or DRIPs) where a company’s dividend payout is used to purchase more shares of the stock. Now that all the major online brokers have slashed their transaction fees to zero, you can reinvest the cash yourself with no extra cost.
Best online brokers for buying fractional shares:
Top online brokers for buying fractional shares
Charles Schwab
Charles Schwab’s Stock Slices allows investors to buy a fractional share of any stock in the Standard & Poor’s 500 Index with as little as $5. Customers can buy up to 30 slices at a time. And like trades for regular shares, you’ll be able to place your trades without a commission. You’ll continue to be able to reinvest any dividends from your stocks into fractional shares of the same stock.
- Fractional purchases: Yes
- Fractional dividend reinvestment: Yes
- Securities in the program: ~500, including all stocks in the S&P 500
Fidelity Investments
Fidelity is routinely a top contender among brokerages, and not surprisingly features a way to buy fractional shares, which it calls Stocks by the Slice. You can start with just $1 and buy shares of more than 7,000 stocks and ETFs listed on U.S. exchanges. You’ll still be able to purchase stocks with zero trading commissions for online U.S. stock and ETF trades, and you’ll also be able to reinvest your dividends in more shares, even fractional shares, whether they’re stocks or ETFs.
- Fractional purchases: Yes
- Fractional dividend reinvestment: Yes
- Securities in the program: More than 7,000 stocks and ETFs
Interactive Brokers
Long known as a high-powered alternative for professional and active traders, Interactive Brokers also offers fractional shares, which is a boon to investors without those deep pockets. You can purchase fractional shares on the broker’s Pro platform (cost: $1 or at the broker’s tiered rate) or on its Lite platform, where trading is free. The downside here is that dividend reinvestment costs the standard commission on the Pro tier, though it’s free on the Lite tier. However, stocks with lower daily volumes and market caps may not be available. Also eligible: ETFs, foreign stocks trading as American depositary receipts (ADRs), Canadian stocks and ETFs, and European stocks.
- Fractional purchases: Yes
- Fractional dividend reinvestment: Yes
- Securities in the program: More than 11,000 stocks, ETFs and ADRs
Robinhood
Robinhood has long been known for its commission-free trading (which extends to options, too), but it also allows you to buy the tiniest fraction of a share. Yes, you can buy as little as one-millionth of a share of your favorite stocks, and you can buy a huge variety of stocks as well. Stocks trading over $1 per share and with a market capitalization greater than $25 million are eligible for the program, and ETFs are available for fractional shares, too. You can also reinvest dividends into fractional shares but you must enable the fractional feature first.
- Fractional purchases: Yes
- Fractional dividend reinvestment: Yes
- Securities in the program: Thousands of ETFs and stocks above the volume and size thresholds
Firstrade
Firstrade offers the usual commission-free stock and ETF trades and even commission-free options trades. Its fractional share program includes more than 4,000 stocks and ETFs available for as little as $5. Plus, the broker offers the ability to reinvest dividends into partial shares.
- Fractional purchases: Yes
- Fractional dividend reinvestment: Yes
- Securities in the program: More than 4,000 stocks and ETFs available
Vanguard
Vanguard allows fractional share investing, but only in its own ETFs, not stocks or non-Vanguard ETFs. The broker does allow you to reinvest dividends in stocks, ETFs and mutual funds. However, Vanguard will not reinvest in certain low-volume stocks, some U.S. stocks and all foreign stocks.
- Fractional purchases: Only in Vanguard mutual funds and ETFs
- Fractional dividend reinvestment: Yes
- Securities in the program: Stocks, ETFs and mutual funds
Tastytrade
Tastytrade is one of the best brokers for short-term traders, but with the addition of fractional shares for both purchases and dividend reinvestment, it’s now a more interesting option for long-term investors, too. There’s a $5 minimum purchase requirement and all fractional share trades incur a $0.10 clearing fee per transaction.
- Fractional purchases: Yes
- Fractional dividend reinvestment: Yes
- Securities in the program: Thousands of stocks and ETFs
SoFi Active Investing
SoFi Active Investing is one of the best brokers for low costs, and it extends that leadership to fractional shares, too. At SoFi, you’ll be able to buy fractional shares directly for a minimum of $5 and reinvest your dividends into fractional shares, a combo that is not always available at brokers offering partial shares. To reinvest dividends, the stock price must be greater than $4 per share, which includes most U.S. stocks and foreign stocks trading on U.S. exchanges.
- Fractional purchases: Yes
- Fractional dividend reinvestment: Yes
- Securities in the program: More than 4,000 stocks and ETFs
WellsTrade
WellsTrade entered the fractional share game in late 2023 with the launch of Stock Fractions which offers access to roughly 500 stocks and ETFs with a minimum of $10 per order. As for dividend reinvestment, while WellsTrade lets you buy new shares with your dividend, you won’t be able to buy partial shares automatically with it.
- Fractional purchases: Yes
- Fractional dividend reinvestment: No
- Securities in the program: Hundreds of stocks and ETFs
E-Trade
E-Trade doesn’t offer fractional purchases of stock, but it does allow investors to reinvest their dividends into fractional shares. E-Trade will reinvest dividends only in a stock or ETF that is trading above $5 per share. However, E-Trade does allow you to set up automatic investments in ETFs and mutual funds for as little as $25, meaning that you can still acquire fractional shares in these securities.
- Fractional purchases: No
- Fractional dividend reinvestment: Yes
- Securities in the program: Thousands of stocks and ETFs can have dividends reinvested
Merrill Edge
Merrill Edge is another broker that allows dividend reinvestment in fractional shares but does not allow clients to purchase fractional shares directly. Merrill lets investors reinvest dividends from stocks and ETFs as well as mutual funds. With an online selection, you can quickly set up whether you want each security in your portfolio to reinvest, and if you change your mind, you can flip your choice later on just as easily.
- Fractional purchases: No
- Fractional dividend reinvestment: Yes
- Securities in the program: Thousands of stocks, ETFs and mutual funds
Fractional shares FAQs
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Fractional shares are a way for investors to purchase stocks or ETFs even when they don’t have enough money to purchase a whole number of shares. For example, if a stock trades for $250 per share, but you only have $100 to invest, you can purchase 0.40 shares.
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Fractional shares give investors the opportunity to invest small amounts of money even when they can’t purchase entire shares. Fractional shares also ensure that your entire investment can be invested, rather than there being a leftover cash balance because you couldn’t purchase another whole share.
You’ll also receive dividends on fractional shares in proportion to your investment. For example, if a company pays a dividend of $1.00 per share and you own 0.50 shares, you’ll receive a 50-cent dividend.
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There are few negatives when it comes to using fractional shares to invest. One thing to be aware of is if you want to transfer shares to a different broker, fractional shares may need to be sold before the transfer can take place. Otherwise, fractional shares are a great way for those starting with small sums to participate in the stock market.
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