Best Fractional Share Investing Brokerages of 2022

The Best Brokers To Buy Fractional Shares and ETFs From

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Fractional shares is an investment term that means less than a full share. If you want to buy stock that costs $200 per share but you only want to invest $10, a fractional share brokerage would allow you to buy 0.05 shares or 5% of a single share. Not all brokerages offer fractional shares, but they are increasingly common among large brokerages with online trading.

The best fractional share investing brokerages give you access to any stock or exchange-traded fund (ETF) listed on a major U.S. stock exchange. It’s important to understand fees and commissions and any account features that may be important to you, such as an active trading platform or options for recurring investments.

Here’s a closer look at the best fractional share investing brokerages to help you make the right choice for your investment needs.

Best Fractional Share Investing Brokerages of 2022

Best Overall : Charles Schwab


Charles Schwab

Charles Schwab

  • Minimum Deposit: $0
  • Fees: No recurring fees or trade commissions
  • Account Types: Taxable brokerage, retirement, education, custodial, trust

Why We Chose It

We picked Charles Schwab as best overall due to its support for a large number of popular fractional share investments with the potential to use an account with no added costs or fees. With most self-managed accounts at Schwab, there are no recurring monthly fees or trading commissions for stocks and ETFs.

Schwab supports all 500 S&P 500 stocks for its fractional share program, Schwab Stock Slices, which allows you to buy into stocks for as little as $5. You can buy any of these stocks through a dedicated Stock Slices section on the website or mobile app. You’re able to buy up to 30 stocks in a single trade. With custodial accounts, you can give Stock Slices as a gift.

Pros
  • No recurring account fees or trade commissions

  • Support for all 500 S&P 500 stocks

  • Buy up to 30 stocks at a time

Cons
  • No recurring purchases

  • Only supports S&P 500 listed stocks

Best for Beginners : Fidelity Investments


Fidelity

Fidelity

  • Minimum Deposit: $0
  • Fees: No recurring account fees or trade commissions
  • Account Types: Taxable brokerage, retirement, education, custodial, trust, HSA

Why We Chose It

Fidelity offers its Stocks by the Slice program with support for more than 7,000 U.S. stocks and exchange-traded funds (ETFs). Accounts have no recurring fees, and stock and ETF trades are commission-free. The fractional share feature is built into the main stock trading system, so you go to the same place to buy a portion of a stock or an entire share.

Fidelity is a top choice for beginners for several reasons. First, you can buy fractional shares starting with just $1, making it easy to get started even if you don’t have much saved up. Fidelity also offers many resources to help you improve your investment skills and strategy at no extra cost. It also offers beginner-friendly investment apps suitable for newer investors.

Pros
  • Invest with no commissions or recurring fees

  • Fractional shares start at $1

  • Trade 7,000 stocks and ETFs 

Cons
  • No recurring purchases for fractional shares

Best for Automated Investing : Betterment


Betterment

Betterment

  • Minimum Deposit: $0
  • Fees: 0.25% annual fee
  • Account Types: Taxable brokerage, retirement, trust

Why We Chose It

Betterment is an automated investing service, better known as a robo-advisor. With Betterment, investors answer questions about their investment goals, age, and risk tolerance. You are assigned to a professionally-designed portfolio of ETFs based on your investment profile.

Because your investment balance likely doesn’t align precisely with the value of the ETFs in your portfolio, Betterment uses fractional shares to keep your portfolio aligned with your target allocation. While Betterment develops a portfolio for you, it isn’t free. The basic level, which is the best choice for most users, requires an annual fee of 0.25% of your account balance. However, depending on your investment knowledge and goals, that could be worthwhile.

Pros
  • Fully automated investment management

  • Custom-built ETF portfolio

  • Automated tax-loss harvesting for eligible accounts

Cons
  • Annual fee required for all accounts

  • No single stocks

  • Less control over your portfolio

Best for Active Traders : InteractiveBrokers


Interactive Brokers

Interactive Brokers

  • Minimum Deposit: $0
  • Fees: No recurring account fees or trade commissions
  • Account Types: Taxable brokerage, retirement, custodial, trust

Why We Chose It

Interactive Brokers offers two types of accounts for different levels of trading and investment goals. With IBKR Lite, accounts have no recurring fees or trading commissions. Interactive Brokers provides excellent tools for active traders, including the needs of a Wall Street professional.

For fractional shares, users have to go through a step to activate the feature in their account. Once turned on, you can trade nearly any stock or ETF on any exchange in the U.S., going far beyond the New York Stock Exchange (NYSE) and NASDAQ to include even many over-the-counter, pink sheet stocks. The minimum order for a fractional share is $1 or 0.0001 shares, depending on how you enter your order.

Pros
  • Trade nearly any U.S. stock or ETF with fractional shares

  • Invest as little as $1 or 0.0001 shares

  • No recurring account fees or trade commissions

Cons
  • Active trading tools may be overwhelming for newer investors

  • More complex pricing structures

Final Verdict

If you’re looking to invest and don’t want the restriction of buying whole shares, a fractional share brokerage investing account is perfect for your needs. Schwab, Fidelity, and IBKR Lite are all excellent options for no-cost investing. Betterment is a good choice for portfolio management, but keep in mind that a fee is required. Depending on the stocks you want to buy and your investment preferences, any of these brokerages could be a good fit.

Compare the Best Fractional Share Investing Brokerages

Company Account Minimum Fees Lowest Investment Amount Fractional Share Offering
Charles Schwab
Best Overall
$0 No recurring account fees or trade commissions $5 S&P 500 Stocks
Fidelity Investments
Best for Beginners 
$0 No recurring account fees or trade commissions $1 7,000 stocks and ETFs
Betterment
Best for Automated Investing
$0 0.25% annual fee N/A Automated ETF investments
InteractiveBrokers
Best for Active Traders
$0 No recurring account fees or trade commissions $1 Nearly all U.S. stocks and ETFs

How Does Fractional Investing Work?

With fractional investing, you don’t need to buy stocks in whole shares. You can buy a small slice of a share, starting around $1 to $5 worth of stock. For example, if you want to buy a stock trading for $1,000 per share but you have $100 to invest, you can buy 10% of a single share using a fractional investing brokerage account.

How Do You Buy Fractional Shares?

Buying fractional shares varies by brokerage, but there are some common steps to follow. First, you will need to open a brokerage account. Next, you’ll need to connect to a bank account to add funds. Once your account is funded, you can buy your first fractional share.

To enter a purchase, head to the trading or fractional share section of your brokerage account’s website or mobile app. Enter the ticker symbol for the stock you’d like to buy and the amount. When you click the buy button, your order is entered. Wait for confirmation that the order has been completed and then you officially own a fractional share.

How Much Do Fractional Shares Cost?

While you can pay as little as $1 or $5 when buying fractional shares, depending on the brokerage, that doesn’t mean the stock price is $1 or $5. The amount of stock you buy for that price depends on the share price.

What Are the Benefits of Investing in Fractional Shares?

Fractional shares give investors access to stocks that they may not otherwise be able to afford. Some stocks cost hundreds or thousands of dollars per share. With fractional shares, investors can access any supported stock, even with limited funds.

Methodology

We are dedicated to providing readers with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs, and fees, security, the mobile experience, and customer service. A rating scale was established based on the criteria, collecting thousands of data points that were weighed into a scoring system.

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