When it comes to investing, fractional shares have become a game-changer, allowing investors to purchase a portion of a stock rather than needing to buy a whole share. This innovation has made investing more accessible, especially for those who want to invest in high-priced stocks but lack the capital to buy full shares. Let’s explore which major brokerage firms allow fractional share investing.
What Are Fractional Shares?
Fractional shares represent a fraction of a single share of stock. For instance, instead of buying one full share of a company like Amazon (which could cost thousands of dollars), you can invest as little as $5 or $10 and own a small fraction of that share. This feature is particularly appealing for beginner investors or those looking to diversify their portfolios without significant upfront capital.
Why Fractional Shares Matter
Fractional shares democratize investing by lowering the barrier to entry. They allow investors to: Diversify Portfolios: Instead of putting all your money into one or two stocks, you can spread your investment across multiple companies. Invest in High-Priced Stocks: Stocks like Tesla or Amazon become accessible even with limited funds. Start Small: New investors can dip their toes into the market without committing large sums of money.
Major Brokerages Where You Can Buy Fractional Shares
You may reference the table provided above for a detailed list of major brokerages and whether they support fractional share investing. Some key players in the industry offering this feature include:
- Charles Schwab: A leader in the brokerage industry, Schwab allows fractional share investing through its Stock Slices program.
- Fidelity Investments: Fidelity offers fractional shares for stocks and ETFs, making it an excellent option for diversified investing.
- Vanguard: Known for its low-cost index and ETF funds, Vanguard also supports fractional investing.
- Robinhood: A popular choice among younger investors, Robinhood makes it easy to buy fractional shares with no account minimums.
- Interactive Brokers: This platform caters to both retail and professional investors with its fractional share offerings.
- SoFi Invest: SoFi provides an intuitive platform for buying fractional shares alongside other financial products.
- Webull: A tech-savvy brokerage that offers commission-free trading, including fractional shares.
Brokerages That Don’t Allow the Buying of Fractional Shares
Some major brokerages still do not support fractional share investing.
- Merrill Lynch: Despite being a prominent name in the industry, Merrill Wealth Management does not offer this feature.
- E-Trade: Another well-known brokerage that currently lacks support for fractional shares.
Conclusion
Fractional shares are revolutionizing how people invest by making the stock market more inclusive and flexible. If you’re looking to start investing or diversify your portfolio without significant upfront costs, consider opening an account with one of the brokerages that support fractional share trading. The table above provides a comprehensive list of options to help you choose the right platform for your needs.