Investing in stocks and other securities has become easy and accessible with the proliferation of online brokers and platforms. Fractional share investing has made it possible for investors with limited funds to gain exposure to a wider range of securities and assets. It enables people to buy shares in companies but with a fraction of the cost that comes with buying the full share outright. Investors can allocate their capital more efficiently and easily building a diversified portfolio. In this article, we will discuss the best brokers for investing in fractional shares.
What is Fractional Share Investing?
Fractional share investing provides an opportunity to buy parts of shares, rather than whole shares. It has removed the traditional barriers to investing, making the markets more accessible to everyone irrespective of their budgets or financial circumstances. Fractional share investing enables investors to purchase fractional shares of stock at a fraction of the cost of buying a full share. This allows individuals to build out a diversified portfolio with better resource allocation compared to buying a share in its entirety. This has eliminated the need to have thousands of dollars in an account to buy just one stock as fractional share investing enables investors to buy as little as $1 worth of a share.
Why Invest in Fractional Shares?
Fractional share investing has opened up the stock market to a much wider audience, including those with limited funds, who would otherwise have not gained access to stocks and shares. By investing in fractional shares, individuals can invest in companies that had previously been out of reach, either due to the cost of buying a full share or from a lack of funds to save. Also, fractional share investing allows for greater diversification of regular investments, as an investor would be able to buy at least one piece of each stock without needing a large sum of money. Lastly, due to the low cost of investing in fractional shares, it is a great way to get started with low-risk investments.
Best Brokers For Investing In Fractional Shares
Below is a list of the best brokers for investing in fractional shares:
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Robinhood:
Robinhood is one of the best brokers for fractional share investing. It is free to use and offers access to several equity markets. Additionally, Robinhood supports fractional share trading and allows investors to trade in partial penny amounts. -
Stash:
Stash is one of the leading brokers for fractional share investing. It allows users to buy fractional shares starting from $1, and even accumulate “lost” fractions by rounding off their purchases to the nearest dollar. -
M1 Finance:
M1 Finance offers a range of commission-free fractional share investment options. It also has trading options for both S&P 500 and cryptocurrency. -
TD Ameritrade:
TD Ameritrade is one of the most popular brokers for both full and fractional share investing. TD Ameritrade supports fractional shares, and it offers a wide selection of stocks, ETFs and other investment options. -
Charles Schwab:
Charles Schwab offers free fractional share trading with no hidden fees or commissions, and no minimums or deposit required. It is a great broker for investors that wants to benefit from fractional share trading. -
Stockpile:
Stockpile is one of the most popular brokers for fractional share investing. It offers fractional shares trading with no commissions, no minimum deposits and no account fees. -
WeBull:
WeBull is a free to use fractional share investing broker that offers access to the US equity markets. This broker also has the option to invest in fractions of cents, which is a great way to diversify portfolios without a high investment requirement.
Fractional share investing has opened up a lot of opportunities for individuals with limited funds who didn’t have the resources to buy a full share. It has made investing in stocks and other securities more accessible and achievable even with the limited budget. Above are some of the best brokers for fractional share trading. However, it is important to research and compare the features of each broker before deciding which one is the best fit for you.