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Fractional shares are a great way to invest in the stock market without costing you an arm and a leg.

Thanks to FinTech applications, many fractional share investing brokerages have cropped up in recent years, creating a considerable amount of competition that has enormously benefited consumers like you.

People love online brokers that offer fractional share investing because they enable people with limited funds, or those who don’t want to risk too much of their capital on any investment, to buy partial stocks and ETFs at low prices.

This demographic typically skews toward younger investors looking to purchase stocks for the first time as they begin investing with small amounts of money.

These fractional share trading online brokers have empowered a new cohort of investors eager to bein investing without fronting an excessive amount of cash upfront nor pay costly commissions as they steadily add to their diversified portfolio of stocks and exchange-traded funds (ETFs).

These low barriers to entry place the best investments within reach of millions for the first time, whether they’re passive investors, self-directed investors, or some combination of both.

The ability to buy fractional shares levels the playing field for building wealth through placing small stock trades on user-friendly investing apps.

This article will discuss the best fractional share brokerages that exist right now and which make the most sense for your unique situation.

By the end of the article, you’ll have what you need to begin trading fractional shares and investing in the stock market—perhaps for the first time!

Let’s jump in!

What Are Fractional Shares?


investing from smartphone medium

Fractional shares are a part of a share—not the whole.

A fractional share is a portion of stock in an individual company divided into many (hence fractional shares). These make investing more affordable and accessible for those who do not have large sums of money available upfront or beginning their careers.

Investing apps that allow you to buy fractional shares typically avoid account minimums or commissions, as these investment vehicles appeal toward individuals without much capital to invest at once.

An account minimum keeps people from starting, and commissions could eat up any amount of money you wish to use for your fractional investing.

The theory behind fractional shares is nothing more than allowing people to invest in a company with a high share price with smaller amounts of money.

For example, if fractional shares were available for Tesla, they could be bought at a fraction of the cost of a full-price share—even a few dollars worth. This would allow people with smaller budgets and those just starting to buy into this fast-growing company.

Before fractional shares investing, you could only do this through purchasing shares in mutual funds or exchange-traded funds (ETF) with the hope that the underlying stocks held by the fund would perform and increase your equity in several companies simultaneously.

Stock markets, like the New York Stock Exchange (NYSE) or the NASDAQ, require investors to buy whole shares in a publicly traded company.

Meaning, people who wish to buy shares in Alphabet or Berkshire Hathaway could only do so if they had a lot of cash on hand or chose to purchase them as part of a larger basket of securities in a mutual fund or ETF.

To make shares in companies like these accessible to everyone, some apps like Robinhood, M1 Finance and others have chosen to offer fractional shares to their users.

This can be a great investment option for new investors looking to buy in some of the most innovative and successful companies on the market without breaking the bank.

How Does Fractional Share Investing Work?


female investor using smart phone app medium

Investors can purchase fractional shares in companies like Alphabet, Berkshire Hathaway and other high-priced stocks without having to buy a whole number of shares (in other words, full shares of stock).

This lowers barriers to entry for investors who may not be comfortable investing a large amount of money into one company’s stock or don’t have enough cash on hand at the time.

This allows small investors to transfer a consistent amount of money into their account and know it’ll get invested at transfer, not only when they’ve accumulated enough money to purchase a whole share.

Likewise, for younger investors who might not have a lot of money to spare, they can link a debit card for kids and teens (or young adults), which then employs a round-up system.

This rounds up your purchase to the nearest dollar, investing the difference automatically in fractional shares. Micro investing apps like this use fractional shares to build account holders’ balances slowly but consistently.

The dollar-cost averaging investment strategy allows for real-time purchasing and not delayed investments over lumpy periods.

Fractional shares allow you to diversify your portfolio with ease, which can help spread the risk of your investments and potentially increase your overall return.

Suppose you had to stash your money until you could afford one high-priced stock. In that case, it might mean your portfolio carries a lot of undesired exposure to a smaller basket of stocks while you wait to accumulate enough money to buy a whole share of a company you want.

Investors also have more control over fractional shares than they do with only buying and selling whole shares. You might not wish to liquidate an entire share of Tesla and instead only need a fourth of the share’s value for some purchase.

Fractional shares allow you to choose exactly how much money you need to pull from the market if you have a financial need.

For example, if Tesla stock is worth $750 and you currently hold $3,500 worth of the stock, you’d own 4.67 shares of the stock.

You might only need $300, lowering your ownership to 4.27 shares of stock. You don’t need to sell a whole share to get cash when you only need a fraction of a share’s worth.

Essentially, fractional share investing allows you to invest in the market on any budget.

Related:

How to Buy Fractional Shares and ETFs


young woman investing on smartphone

Many investing brokerages allow you to place stock and ETF trades for fractional shares, reducing the dollar amount you need to commit upfront when buying stocks by the slice.

These stockbrokers have enabled a new generation of investors to buy into the market without credence to share prices thanks to fractional trading capabilities.

When balancing student loans, living expenses and other competing money priorities, having the ability to invest through an institution that equips you with the tools that make any stock accessible is valuable.

The best options on the market that we’ve found are found below.

Best Fractional Share Brokerage Account Options for Buying Partial Stocks and ETFs


App Rating (out of 5)FeesBest ForPromotions
Acornsacorns logo4.8$1/month - $5/monthAutomated investing in the background into diversified investments$10 sign up bonus when making first deposit at account opening
SoFi Invest: iOS, Android and Desktopsofi logo4.6Commission-free tradesFee-free active trading and automated investingFree stock worth between $5 - $1,000
Public.compublic logo4.7Commission-free tradesSocial theme-based investing interests$10 free stocks for signing up
Webullwebull logo4.7Commission-free tradesSelf-directed investors and intermediate tradersTwo free stocks with $5 deposit, valued between $11 - $2,300
M1 Financem1 finance logo4.3$0 trading or automated investing; $125/year on M1 Plus subscription for custodial accountFee-free active trading and automated investing$30 sign up bonus with $1,000 deposit
Greenlight + Investgreenlight logo4.7$7.98/monthTeaching investing fundamentals with guidance from parents; allows individual and index fund investingOne month free
Robinhoodrobinhood logo4.4Commission-free tradesBasic stock, crypto and ETF investingFree stock with sign up

1. Acorns: Best Micro-Investing App to Learn About Investing


acorns

  • Available via Apple iOS and Google Android.
  • Price: Acorns Personal: $3/mo & Acorns Family: $5/mo
  • Sign up here

Acorns is a micro-investing app for minors and young adults who wish to start with a small amount of money in their investments. You can choose to invest your spare change through a linked debit card and make regular deposits to contribute to your investment portfolio.

These recurring contributions and rounded-up deposits from your purchases could grow into an extensive portfolio over time. Hence the company’s name, Acorns: start small like an acorn but grow strong into a mighty oak tree.

The service charges a monthly fee for users. Though, it doesn’t charge trading commissions when your money gets invested on your behalf in fractional shares of ETFs. Instead, it charges an account fee depending on the subscription plan you select for your account.

Currently, the service has multiple offerings that come with different features, including Acorns Personal for $3/mo and Acorns Family for $5/mo.

These subscriptions provide various product features that fit well for young adults’ goals, like investing young and managing your money prudently.

The service efficiently acts as one of the best money apps for kids with its all-in-one platform (Acorns Family).

Their plans come as follows:

  1. Acorns Personal ($3/mo):
    • Acorns Invest: Invests spare change through the famous “Round-Ups” feature, earns bonus investments and provides access to financial literacy articles
    • Acorns Later: Tax-advantaged investment options like IRAs
    • Acorns Spend: Acts as your bank account, offering free withdrawals at over 55,000 ATMs nationwide and no account fees and the ability to earn up to 10% bonus investments
  2. Acorns Family ($5/mo):

Learn more in our Acorns review.

Related: Best Acorns Alternatives: Micro-Investing Apps to Use

2. SoFi Invest: Invest in Stock Bits


sofi invest free stocks

  • Available via desktop, Apple iOS and Android App on Google Play.
  • Price: Free trades
  • Sign up here: (iOS), Android, Desktop

SoFi Invest is an app that allows you to invest in stocks with whatever dollar amount you prefer because the app offers its investing products with fractional shares in stock and ETF trades.

The well-known brand in the personal finance space expanded its presence to the investing world by offering commission-free stock trades, including ETF trades and crypto trades.

The fractional share service provides you the ability to trade actively or stand back and let its automated investing tools takeover.

Of interest to beginning investors, using a brokerage account through SoFi allows you to participate in fractional share investing, called “stock bits” by SoFi.

This means you don’t need to save up a lot of money before buying some of your favorite tech companies like Alphabet (Google), Amazon or Facebook.

The app acts as an excellent choice for investing your spare change or adding more to the market at once by tapping into savings accounts to make more significant deposits regularly.

Therefore, this fractional share app might make an excellent place to hold your investment accounts because you’ll have options for investing money.

The company wants to serve all customers interested in improving their financial situation alongside participating in their other personal finance products like refinanced student loans, money management, credit cards and more.

Start investing in fractional shares by making a $5 deposit today.

Related: Best Credit Cards for Kids: Building Credit & Money Habits Early

3. Public.com: Best Free Investment App for Beginners


public.com sign up

  • Price: Free trades
  • Sign up here

Public.com is a commission-free fractional share investing app targeting Millennials and Gen-Zers who have attuned their senses to social media.

While the company previously followed the lead of companies like Robinhood with monetizing Payment for Order Flow (PFOF) or receiving kickbacks from clearinghouses for routing trades to them, they’ve abandoned this practice.

Instead, they now rely on other income streams as well as a “tipping” system.

The decision not to route orders to specific clearinghouses places this beginner investment app firmly on the side of retail investors and not pledging allegiance to Wall Street firms.

Why is Public.com a Good Investment App for Beginners?

Public.com is really about making investing like an investing social network, where members can own stock slices, or fractional shares of equities, follow popular creators, and share ideas within a community of investors.

What Public.com aims to do above all else is make the market an inclusive and educational place, with social features that make it easy to collaborate as you build your confidence as an investor—for free.

For younger investors who want to align their investing with their social preferences and keep good company to socialize and learn from others, Public.com might be the app for you.

For those interested in starting to trade on Public.com, the online fractional share brokerage platform for beginners offers a free $10 signup bonus if you make an initial deposit. Further, you can share your unique link with others and gift them stock slices as well.

If this sounds like an interesting fractional share trading app, open an account and make an initial deposit to see if the app meets your social and investing needs.

Read more in our Public.com investing app review.

Related: 10 Best Stock Tracking Apps [Investment Portfolio Management]

4. Webull: Best Stock Trading App for Beginners


webull sign up

  • Available via desktop, Apple iOS and Google Android.
  • Price: Free trades
  • Sign up here

Webull came into the stock trading world in 2018 when it started challenging Robinhood for market share. This stock trading app offers the ability to place equity trades commission-free and on ETFs, options and cryptocurrencies.

The company also recently added the ability to trade fractional shares, making this an excellent app for micro-investing.

Like most investment apps available, the company provides access to trade on your smartphone, tablet or desktop.

Further, it charges no commissions for the trades because Webull makes money on other actions you take, like Payment for Order Flow (PFOF), margin loans, interest on cash and service fees for their Nasdaq TotalView Level 2 Advances quotes subscription.

Webull also provides you access to several powerful tools you can use for in-depth trading analysis.

If these account features sound attractive, the best part might also come with knowing setting up a Webull account is free and comes with no account minimums you must meet or maintain.

Finally, to de-risk your signup, Webull also runs frequent promotions that give free stocks.

Read more in our Webull review.

 

5. M1 Finance: Build a Portfolio Pie of Fractional Shares of Stock


m1 finance

  • Available via desktop, Apple iOS and Google Android.
  • Price: Free trades
  • Sign up here

The M1 Finance app offers investors two options for investing on their platform.

The first option entails a traditional investing method: build your tailored portfolio with your picks of stocks and ETFs you think will meet your investment objectives.

Suppose that option sounds unappetizing or otherwise uncomfortable from an investment selection perspective. In that case, you can opt for the company’s pre-made “Expert Portfolio Pies” containing different stocks and ETFs for your money.

With either option, you can set predetermined percentage amounts for your M1 Finance investment account (they offer several types of investment accounts, including a custodial Roth IRA and traditional individual retirement accounts) and then trade stocks to match those percentages.

This allows users of M1 Finance to buy fractional shares of stock on their own without an extra charge or trading commissions.

As you earn dividends, you can choose to participate in automated dividend reinvestment plans following your portfolio preferences, making automated investing through M1 Finance one of the best passive income investment ideas.

Read more about the app in our M1 Finance review.

 

6. Greenlight + Invest: Fractional Share Investing for Minors


greenlight sign up

  • Available: Sign up here
  • Price: Free 1-month trial, $7.98/mo after for Greenlight Card + Invest package

Greenlight + Invest is an investment account for kids paired with a debit card and bank account.

It’s easy to use and can double as a savings account and banking apps for teens. The app will teach the basics of investing, how to invest money in stocks and ETFs, etc.

It works best if parents and/or grandparents are involved in the process because it requires linked accounts from the custodians’ banks or brokerages. Plus, parents and guardians will need to approve trades made in the investment account.

The all-in-one plan teaches them critical financial skills like money management and investing fundamentals — with real money, real stocks and real-life lessons.

You can use the investing feature to invest in stocks:

  • Buy fractional shares of companies your kids admire (kid-friendly stocks) or in an exchange-traded fund
  • Start investing with as little as $1 in your account (with fractional shares)
  • No trading commissions beyond the monthly subscription fee
  • Parents approve every trade directly in the app on individual stocks and ETFs with a market capitalization of $1 billion+

Consider opening a Greenlight Card + Invest account to start investing in a custodial brokerage account for your kids today. The first month is free to trial the product and see if it meets your needs for giving one of the best investments for kids.

Read more in our Greenlight Card review.

Related: goHenry vs. Greenlight: Who Has the Best Debit Card for Teens?

7. Robinhood: Buy Fractional Shares of Commission-Free Stock


robinhood

  • Available via desktop, Apple iOS and Google Android.
  • Price: Free trades
  • Sign up here

Robinhood is an investing app geared toward millennials who want to invest from the convenience of their smartphones.

Made famous for forcing the brokerage industry to adopt commission-free trading of individual stocks and ETFs, Robinhood allows trading access to millions of investors through fractional share trading.

Robinhood makes money mainly from monetizing its order flow instead of charging commissions to buy fractional shares of stock (or even to sell fractional shares). Previously, the industry’s lowest commissions belonged to Interactive Brokers, who only charged $2/trade.

The company offers fractional share purchases as part of their Robinhood Instant account, which can be accessed by signing up for the service on the website.

While there is no fee to open an account with Robinhood, they charge $0.0025/share when a stock position is opened and then rebates that amount when the position is closed.

Though, these fees come with all brokerages due to rules set up to fund the Securities Exchange Commission (SEC).

Users have access to stocks that trade on the NYSE, NASDAQ and AMEX exchanges, and ETFs listed in the US Market from a variety of issuers at fractional share prices.

The app allows users to participate in fractional trading of stock slices in up to four different companies simultaneously with no commission fees. Robinhood has no account minimum for fractional share trading.

 

8. Charles Schwab: Invest in Stock Slices


charles schwab sign up

  • Available via desktop, Apple iOS and Google Android.
  • Price: Free trades

Charles Schwab offers similar products as all the other brokerages listed here, including Schwab Stock Slices, Schwab’s version of fractional shares.

Instead of paying the entire stock price on one share of stock, fractional share trading through Schwab Stock Slices allows you to buy fractional portions of stocks commission-free.

The fractional share investing product allows users to participate for as low as $5, with the ability to buy up to 10 Schwab Stock Slices at a time.

Charles Schwab differs from other investing brokerages on this list by only allowing you to make fractional share purchases for S&P 500 companies.

This compares to investing brokerages like those above and Fidelity and Interactive Brokers, except they don’t have such restrictions on their fractional share investing features.

While good choices exist in the S&P 500 index, extending the Schwab Stock Slices capability to medium and small business opportunities outside of the index can be helpful for anyone seeking opportunities beyond the widely-tracked index.

Fractional Share Brokerages FAQ

Can you buy stocks as whole shares?

Yes. You do not need to buy fractional shares only through these brokerages, and you can buy fractional shares and whole shares of stock.

Do you need to maintain an account minimum in these accounts?

Many of the accounts above do not require an account minimum. Specialty accounts, like the Roth IRA from M1 Finance, have account minimums—$500 in this case.

Do any fractional shares brokerages offer investment advice?

Many of these fractional share brokerages conduct a questionnaire when signing up to understand your investment goals, risk tolerance and investment time horizon.

After answering these questions, some robo-advisor options offer financial advice on how to invest your money.

What happens to fractional shares when stock splits occur?

Like whole shares of stocks, when stock splits occur, the amount of your position divides in the same way. For example, if you owned 100s of TSLA and a 3:1 stock split occurred, you’d have 300 shares of TSLA stock afterward.

The market cap remains the same, but the shares outstanding triples.

If you owned 33.3 fractional shares of TSLA stock, you’d have 99.9 fractional shares of TSLA following the stock split.

Do any of these fractional shares brokerages have custodial account options?

Yes. Many of the accounts above, like Acorns, M1 Finance and Greenlight, offer custodial accounts to underage investors. All make great picks as the best stock trading apps for beginners.

Do fractional shares affect capital gains and losses in taxable accounts?

There is no difference in capital gains and losses on fractional shares in taxable accounts compared to whole shares.

How do fractional shares affect dividend reinvestment opportunities?

Fractional shares allow for easier dividend reinvestment because you don’t need to receive enough dividends to wait for purchasing whole stock shares.

About the Site Author and Blog

In 2018, I was winding down a stint in investor relations and found myself newly equipped with a CPA, added insight on how investors behave in markets, and a load of free time.  My job routinely required extended work hours, complex assignments, and tight deadlines.  Seeking to maintain my momentum, I wanted to chase something ambitious.

I chose to start this financial independence blog as my next step, recognizing both the challenge and opportunity.  I launched the site with encouragement from my wife as a means to lay out our financial independence journey and connect with and help others who share the same goal.

Disclaimer

I have not been compensated by any of the companies listed in this post at the time of this writing.  Any recommendations made by me are my own.  Should you choose to act on them, please see the disclaimer on my About Young and the Invested page.

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