Buying fractional shares can be a smart way to invest for someone who doesn’t have the capital to buy whole shares at once though wants to start investing now. Further, you get the option of selling only what you need and not necessarily a whole share.
What are Fractional Shares?
Fractional shares are a part of a share – not the whole. A fractional share is a portion of stock in an individual company that has been divided up into many shares, typically to make investing more affordable and accessible for those who do not have large sums of money available upfront or are just beginning their careers.
How Do Fractional Shares Work?
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).
How to Buy Fractional Shares
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 stock brokers have enabled a new generation of investors to buy into the stock market without credence to share prices thanks to fractional trading capabilities.
Brokerages Offering Fractional Share Purchases
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.
1. Acorns
2. SoFi Invest
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.
3. Public.com
Public.com is a commission-free investing app that targets Millennials and Gen-Zers who have attuned their senses to social media.
4. Webull
Webull came into the stock trading world in 2018 when it started challenging Robinhood for market share. This stock trading app offers free stock trading (no trading fees) as well as free trades on ETFs, options and cryptocurrencies.