If you want to invest in the stock market, you might be scared off by the perception that you need thousands of dollars right from the start. But that isn’t true. In fact, you can get involved without even buying a whole share of stock at once. With fractional share investing, you can buy as little as $5 or $10 of stock in a single commission-free trade.
Whether you’re starting small, teaching your kids how to invest, looking to create a more diverse portfolio, or prefer choosing your investment size by dollars instead of shares, one of these best fractional share investing brokerages could be right for you.
Best Fractional Share Investing Brokerages of 2021
Best Overall : Charles Schwab
Why We Chose It: Charles Schwab is our pick for the best overall fractional shares brokerage due to its support for 500 of the biggest U.S. stocks with commission-free trades and access to a variety of well-supported online and mobile platforms.
Commission-free stock trades
Buy stocks with as little as $5 in any amount
Create a portfolio by trading up to 30 stocks at a time
Only supports S&P 500 stocks
Charles Schwab is a large, full-service brokerage with discount pricing. Schwab supports fractional shares through its Stock Slices program. You can buy and sell stocks in the S&P 500 in any amount starting at $5. Using Stock Slices, you can buy up to 30 different stocks at a time.
Schwab is our overall winner because it offers a little something for everyone and pricing that’s just about unbeatable, as there are no commissions on any stock trades at Schwab. With a Schwab account, you can use any of Schwab’s tools including its active trading platform, web trading platform, and mobile app, though Stock Slice purchases must be made within its own section of the Schwab website or app.
Within Stock Slices, you can search for specific stocks by name or ticker symbol or browse stocks by sector such as financial, health care, or energy stocks. Schwab makes getting started with investing inexpensive and accessible and gives you the tools to grow from there.
Best for Building a Portfolio : M1 Finance
Why We Chose It: With M1 Finance’s portfolio allocation tool, you choose your allocation by percentage and how much to invest, and M1 Finance splits up your investment into fractional shares of each stock with no commissions or fees.
Choose your portfolio allocation and M1 calculates the rest
Support for automated investing
No commissions and few fees
$100 minimum required starting balance
If you want to build a portfolio of stocks using fractional shares, M1 Finance could be the right home for your portfolio. With M1 Finance, you decide on a portfolio and allocation. When you fund your account, the dollars are automatically split up among your investments. If that involves buying odd dollar amounts or fractional shares, no problem. Each portfolio, called a Pie, can hold up to 100 different stocks, ETFs, or other Pies.
To get started, you’ll need to deposit at least $100 (or $500 for retirement accounts). Once your account is open, you can buy fractional shares of more than 6,000 stocks and ETFs. There are no commissions and no fees for regular investment activity.
If you want to keep building your portfolio over time, M1 also supports automated investing. You can invest on a regular schedule in your Pies or a Pie designed by the M1 Finance team. Its unique approach to investing makes it a good fit for both beginner and experienced investors.
Best for Automated Investing : Betterment
Why We Chose It: You can quickly tell Betterment your investment goals and it will choose an expert-designed portfolio or one that aligns with your ethical investment goals at a reasonable price point for fully managed investing.
Fully automated investing
Portfolios align with your investment goals
Options for socially responsible portfolios
Annual fee required for investment management
If you don’t want to handle picking stocks or funds and want it all done for you, Betterment is a top choice. When signing up for Betterment, you’ll fill out a short survey about your investment goals. Based on the results, you are matched with a professionally-designed portfolio that fits with your goals.
For investors who prefer socially-minded investments, you can alternatively choose between three portfolios to align with your preferences. All portfolios are made up of low-cost ETFs. Those ETFs, which may be bought on your behalf in fractional shares, in turn, buy a mix of stocks and bonds assets on your behalf.
Betterment is a long-time industry leader for automated investing. The big downside is that it isn’t free. You can choose between a fully digital plan with a 0.25% annual fee or a higher-end plan for large accounts that includes access to a financial advisor for 0.40% per year. That’s less than you would pay for a traditional financial advisor, but more than you would pay for a fully DIY approach.
Best for New Investors : SoFi
Why We Chose It: SoFi is best for new investors because it makes choosing your first investments easy while putting investment education resources right next to trading tools.
Invest with as little as $1
No commissions or fees
Easy-to-use investment platform
Support for fewer than 50 stocks and ETFs
SoFi is a financial company that makes investing in stocks simple and approachable. Once you log in and fund an account, you can browse collections of stocks to find the perfect investment for your account. Stock Bits, SoFi’s fractional share product, are available for $1 or more.
SoFi charges no commissions or fees for regular stock investing activity. The only big downside is that SoFi only offers 43 stocks and funds in its Stock Bits collection. While that’s a fairly narrow list, it also takes away some of the intimidation of choosing a stock or fund from the thousands of options on the New York Stock Exchange or NASDAQ.
The investment features are not loaded with tools for the most active investors but work very well for those who are newer to the markets or want a simpler investment experience. If you are brand new to the stock market, that makes it a great choice.
Best for Investment Goals : Fidelity
Why We Chose It: Fidelity’s goal-oriented apps and retirement tools make it a good choice for investors looking to reach specific investment goals.
Invest in stocks and ETFs with as little as $1 with no commissions
More than 7,000 fractional share stocks and ETFs
Useful goal-oriented investment apps and tools available at no added cost
Additional app download required for some tools
Fidelity is a large discount brokerage firm that leads the industry in preparing investors for retirement. But it’s also a top choice for fractional shares, with support for virtually the entire market of U.S. stocks and ETFs and no commissions or fees for regular stock trades. You can invest in stocks with as little as $1 in most fidelity brokerage and retirement accounts.
In addition to great research tools to help you choose your stocks, Fidelity offers additional apps and tools to help you manage your overall portfolio to reach your goals at no added cost. That includes the Fidelity Spire app to help you save and invest for specific goals and a suite of retirement tools and calculators for that really long-term goal.
There’s not much to complain about with Fidelity’s fractional shares product. Its active trading tools are not quite up to what you get with some competitors, but for most people looking to buy fractional shares, that’s not a major issue. Instead, you can take advantage of Fidelity’s tools to encourage good habits for passive investors to grow your portfolio over time.
Best for Active Traders : InteractiveBrokers
Why We Chose It: The trading platforms and tools at InteractiveBrokers make it our top choice for active traders who want a professional-level experience.
Professional-quality desktop platform designed for active traders
Fractional share investments start at $1
Advanced trading tools for desktop, mobile, and the web
Inactivity fees apply to some accounts
Advanced platforms may be overwhelming to newer investors
InteractiveBrokers (IBKR) is a winner for active traders thanks to its investment platforms, which include advanced charting, complex trades, and many of the same features used by Wall Street pros when running an active investing strategy. While professional traders are likely trading in much bigger lots, you can use the same tools they do when managing your fractional share portfolio under either the IBKR LITE or IBKR PRO plans.
You can buy fractional shares starting at just $1. Under IBKR Lite, there are no commissions for trades. IBKR Pro clients can choose between tiered and fixed-rate pricing plans. IBKR Pro accounts are designed for active traders and charge inactivity fees if you don’t maintain a minimum account balance (usually $100,000). IBKR Lite doesn’t have the activity fee requirement.
Once you’re logged in, you can build a diverse portfolio using an advanced set of trading tools. Its mobile, desktop, and web-based platforms come filled with high-end features and charting tools like ChartTrader, which supports live charting, more than 120 technical indicators, extensive customization, and integrated trading. The flagship Trader Workstation desktop platform gives you the most advanced experience.
Best for Social Investing : Public
Why We Chose It: Public is best for social investing because it enables you to view trades and portfolios of other members to help you refine your investment strategy.
Commission-free stock and ETF trades including fractional shares
Community features to interact with other traders
Simple investment platform suitable for beginners
Mobile trading only, no web experience
Limited stock research information
Public connects you with other investors to give you a fun and social investing experience. You can buy fractional shares while learning from other investors and sharing what you pick up along the way. You can view and mimic trades made by other investors or message with others to chat about a strategy. How you engage is up to you.
But those extra features don’t mean an extra price tag. Public is commission-free and there are no fees for typical investor activity. While Public is for active traders, day trading isn’t allowed. Most of its portfolio tools are designed to help you actively manage your investments toward long-term objectives.
Public also offers Themes, which are categories of stocks that make it easy to quickly navigate by topic and build a portfolio you believe in. However you decide to invest, you can check in with your community and know you’re getting a good price (free) with an account at Public.
Fractional share investing is a great way to get started in the stock market, build a diverse portfolio with less than $100, or can simply take some of the hard math out of investing. Whatever your motivation for looking for fractional shares of stock or ETFs, any of these top brokerages could be a great choice for your unique goals.
Charles Schwab is our best overall due to its support for 500 of the biggest stocks in the United States with no commissions and access to a wide range of resources that work well for beginner, expert, passive, and active investors alike. However, any brokerage on this list could be a good fit for your fractional share investing and trading needs.
|Brokerage Firm||Why We Chose It||Stock Commissions and Recurring Fees|
|Charles Schwab||Support for 500 of the biggest U.S. stocks and features that meet the needs of most investors||No commissions or recurring fees|
|M1 Finance||Automatically allocate your investments in a portfolio you choose||No commissions or recurring fees with Basic account|
|Betterment||Fully automated investing in a portfolio aligned to your goals||0.25% annual account fee with Digital account|
|SoFi||Easy-to-use brokerage that helps you navigate supported stocks and ETFs by theme||No commissions or recurring fees|
|Fidelity||Invest in 7,000 fractional stocks and ETFs with access to additional tools to help you save for retirement and other goals||No commissions or recurring fees|
|InteractiveBrokers||Advanced charting and trading tools suitable for expert investors and active traders||No commission plan available; inactivity fees may apply|
|Public||Easy-to-use brokerage with community features to learn from others||No commissions or recurring fees|
What Is a Fractional Share?
A fractional share is less than a single share of a company. Buying a fractional share allows you to invest in a company without investing the full value of a business's whole share. You can buy a fractional share of a large business for as little as $5 or $10, making it easy to get started in investing in stocks at any time instead of saving for the full amount of a share or several shares.
How Do Fractional Shares Work?
By allowing investors to select the dollar amount they wish to invest, fractional shares help smaller investors get involved with buying stock in large companies, which they would likely be left out of if they had come up with the full share price. Some companies have a share price well over $1,000, which could be difficult for many investors to purchase.
Most stock exchanges, including the New York Stock Exchange (NYSE), require you to buy a whole stock. Many brokerages will buy that share and then divvy it up to many of their investors so that everyone can enjoy the benefits of investing in some of the most successful public companies.
What Types of Brokerages Offer Fractional Shares?
Not all brokerages offer the opportunity to purchase fractional shares. Most brokerages that offer this type of investment are non-traditional financial companies and aren't typically the big-name brokerages or investment firms. However, more and more are adopting these options all the time.
Instead, it tends to be more boutique or app-focused brokerages that offer these fractional share investment options. If this is the right type of investment for you, you'll need to find the right brokerage with a history of successful investing and a significant number of customer reviews.
How Much Do Fractional Shares Cost?
The minimum amount you must invest for a fractional share depends on the brokerage you choose, but most require a minimum of about $5. The amount you'll pay the brokerage for each trade also varies. Many brokers will charge you on a per-trade basis, anywhere from $1 to more than $5 per trade. Others offer free trades for stocks or charge a monthly fee for unlimited trades on their platform.
What Are the Benefits of Investing in Fractional Shares?
Fractional share investing offers several benefits. On major stock exchanges like the New York Stock Exchange, for example, the exchange itself requires you to buy at least one share at a time. For stocks like Alphabet ($1,700+ per share), Amazon ($3,200+ per share), or Berkshire Hathaway (over $335,000 per share), that means many smaller investors would be left out of the action.
With fractional share investing, you can buy into those stocks or others with whatever assets you have available. Whether you want to buy $5 of a large group of stocks to build a portfolio or are a newer investor with $20 set aside for your first stocks, you can easily do it with fractional shares.
How We Chose the Best Fractional Share Investment Brokerages
To choose the best brokerages for this list, we reviewed over a dozen investment firms. Outside of managed investment services, brokerages must offer commission-free trades and platforms that are widely usable for the typical investor. In addition to the ability to trade fractional shares, we focused on pricing, platforms, and the number of investments supported for fractional shares.