While it is true that investing has become more democratized in today’s financial landscape, one of the most important changes is the ability to buy and sell fractional shares. Fractional shares let investors buy just a piece of stock, allowing them to mix and match their portfolios without needing significant amounts of capital. For both experienced investors and amateurs, trading fractional shares is an effective way to diversify a portfolio with the smallest amounts of cash. Here are the top 10 platforms for trading fractionals in 2024.
1. Robinhood
Robinhood was a trailblazer with fractional share trading. With its easy interface and commission-free trades, it has opened up investing to millions of retail investors. You can invest in any stock with as little as $1, which is great if you want to start investing without a ton of money.
Key Features
- Commission Free: Trade stocks, ETFs, options, and cryptocurrency free of commission fees.
- App Interface: Simple and easy design, user-friendly for beginners.
- Fractional Shares: Buy/sell any dollar amount of a share.
Pros
- No account minimums.
- Savings have no locked-in period, and you can withdraw after selling shares.
- Customer Cash Management Account available.
Cons
- Limited research and education.
- Customer service can be slow.
2. Fidelity
Fidelity is an industry giant widely recognized as a one-stop shop for creating financial success. The platform provides fractional share trading via their Stocks by the Slice program, giving investors access to shares of any stock in the S&P 500 for as little as $5.
Key Features
- Advanced Research Tools: Get deep-dive market and research reports.
- Commission-Free U.S. Stock and ETF Trading.
- Fractional Shares: Invest in any S&P 500 stock with as little as $1.
Pros
- Robust customer service.
- Various investing opportunities.
- Good educational materials.
Cons
- Can be intimidating for beginners.
- Mutual funds not on the no-transaction fee list have pricey fees.
3. Charles Schwab
Charles Schwab offers full- and partial-share trading via its Stock Slices program. It allows investors to acquire fractional shares of any S&P 500 company starting with as little as $5 each.
Key Features
- Variety of Investment Choices: Choose from thousands of securities like stocks, bonds, ETFs, and mutual funds.
- Research and Tools: Extensive research tools and financial planning resources.
- Now Supporting Fractional Shares: Buy parts of S&P 500 stocks.
Pros
- No account minimums.
- 24/7 customer service.
- No-commission online trades for U.S. stocks and ETFs.
Cons
- The trading platform may be a bit much for beginners.
- Not many international equities to choose from.
4. M1 Finance
M1 Finance is a hybrid of both robo-advising and traditional brokerage services. Regular investors can create their own “pies,” groups of fractional shares they hold, and M1 Finance will manage your pies for you automatically.
Key Features
- Create Your Own Portfolio: Design and administer bespoke investment portfolios.
- Auto Reinvest: Automatic rebalancing of your portfolio and reinvesting dividends.
- Fractional Shares: Trade fractional shares of stocks and ETFs.
Pros
- Zero trading fees and no commissions.
- Cash management account included.
- Easy-to-use interface.
Cons
- Limited customer support.
- No tax-loss harvesting.
5. E*TRADE
E*TRADE offers fractional shares in 1,000 stocks and ETFs to its investors.
Key Features
- Advanced Trading Tools: Advanced research and trading tools at your fingertips.
- Unit Shares: Buy fractional shares of select stocks and ETFs.
Pros
- No commission on online U.S. stock, ETF, and options trades.
- Great educational resources.
- Strong customer service.
Cons
- Broker-assisted trades have higher fees.
- The platform can be complicated for beginners.
6. Interactive Brokers
Interactive Brokers is known for its sophisticated trading platform and variety of investment options. IBKR offers fractional share trading on U.S. and global markets.
Key Features
- Global Trades: Trade in stocks, options, futures, forex, and bonds.
- Lively Trading Tools: Insights and advanced trading tools.
- Fractional Shares: Invest in fractional shares of U.S. and global stocks.
Pros
- Low fees for trading.
- Access to global markets.
- Strong study and education resources.
Cons
- Too complex for starters.
- Fees for non-active accounts with low funds.
7. Stash
Stash is a mobile micro-investing app intended for beginners. It provides stock and investment share trading for as low as $5.
Key Features
- Study Materials and Investment Suggestions.
- Trading Automation and Rebalancing.
- Low-Cost Investing in Shares or Stocks.
Pros
- A minimum initial investment.
- Intuitive portal.
- Personal investment assistant available.
Cons
- Monthly charges.
- Limited option trading compared to common brokerage.
8. SoFi Invest
SoFi Invest offers a range of financial services, including fractional share trading without any account fees or minimums.
Key Features
- Invest in Individual Shares and ETFs for as little as $1.
- Robo-Advising: Investment tool with no fees.
- Additional Benefits: Wealth management and career counseling.
Pros
- No fees for trading or account creation.
- Simple mobile application.
- Additional financial services available.
Cons
- Limited knowledge and learning materials.
- Fewer investment choices than some competitors.
9. Betterment
Betterment is a robo-advisor, providing automated investment management services. You can buy fractional shares, though they are just a wrapper for ETFs, so not all stocks are available.
Key Features
- Robo Advising: Algorithmic management of a personalized portfolio.
- Fractional Shares: Invest in fractions of whole shares for ETFs.
- Tax-Efficient Investing: Automatic tax-loss harvesting to improve returns.
Pros
- Low management fees.
- Goal-based investing.
- Extensive financial planning tools.
Cons
- Limited to ETF investments.
- No direct stock trading.
10. Public.com
Public.com is a social investing app that lets anyone buy and sell fractional shares of stocks.
Key Features
- Social Investing: Connect with other investors and share insights.
- Fractional Shares: Invest in fractional shares for as low as $5.
- Trade Stocks & ETFs with No Commission Fees.
Pros
- User-friendly interface.
- Community-driven investment ideas.
- No account minimums or fees.
Cons
- Limited research tools.
- Less selection of stocks and ETFs compared to traditional brokers.
11. Acorns
Acorns is a micro-investing app that rounds up your everyday purchases and invests the spare change into diversified portfolios of ETFs. It’s designed to make investing easy for beginners by automating the process.
Key Features
- Round-Ups: Automatically invest spare change from everyday purchases.
- Automated Portfolio Management: Professionally managed portfolios that rebalance automatically.
- Fractional Shares: Invest in fractional shares of diversified portfolios.
Pros
- User-friendly and ideal for beginners.
- Low minimum investment.
- Offers additional financial services like retirement accounts.
Cons
- Monthly fees can add up for small balances.
- Limited to ETF investments.
12. TD Ameritrade
TD Ameritrade offers a comprehensive trading platform that caters to both beginners and experienced investors. Their fractional shares trading is available through the Schwab Stock Slices program.
Key Features
- Educational Resources: Extensive library of educational content.
- Trading Tools: Advanced trading tools and research capabilities.
- Fractional Shares: Buy fractional shares of any S&P 500 stock.
Pros
- No commission fees on online U.S. stock and ETF trades.
- Excellent customer support.
- Robust mobile app.
Cons
- High fees for certain mutual funds.
- The platform can be overwhelming for beginners.
13. Vanguard
Vanguard is known for its low-cost investment options and strong focus on index fund investing. They offer fractional share trading for ETFs and stocks, making it easier for investors to diversify.
Key Features
- Low-Cost Investing: Focus on low-cost index funds and ETFs.
- Fractional Shares: Available for a wide range of ETFs and stocks.
- Strong Research Tools: Comprehensive research and educational resources.
Pros
- Low expense ratios.
- No commission fees for online trades.
- Strong reputation and reliability.
Cons
- Limited trading tools compared to other platforms.
- No direct access to individual stocks for some account types.
14. Ally Invest
Ally Invest provides a robust trading platform with a wide range of investment options, including fractional shares. It’s a great option for both active traders and long-term investors.
Key Features
- Commission-Free Trades: No commission on U.S. stocks, ETFs, and options trades.
- Fractional Shares: Available for a wide range of stocks and ETFs.
- Integrated Banking Services: Seamless integration with Ally Bank.
Pros
- Competitive pricing and low fees.
- User-friendly platform.
- Strong customer service.
Cons
- Limited advanced trading tools.
- No direct cryptocurrency trading.
15. Webull
Webull is a mobile-first brokerage that offers comprehensive trading features and no commission fees. It’s popular among tech-savvy investors and those looking for advanced trading tools.
Key Features
- Commission-Free Trading: No fees on stocks, ETFs, options, and cryptocurrencies.
- Advanced Charting Tools: Extensive charting tools and technical indicators.
- Fractional Shares: Invest in fractional shares of thousands of stocks and ETFs.
Pros
- No minimum deposit requirement.
- Real-time market data and advanced tools.
- Paper trading feature for practice.
Cons
- Limited educational resources.
- Customer service can be slow.
Conclusion of Platforms for Trading Fractional Shares
Prior to fractional share trading, investment management was limited to full shares. Now, a whole world of assets is available in small or large pieces. Each platform mentioned here provides different features and benefits, catering to specific types of investors. Whether you’re a beginner or an experienced trader, one of these platforms could be right for you. Happy investing!
Bearing that in mind, this blog provides detailed insights on today’s leading fractional shares trading platforms with a key feature breakdown, pros, and cons. This post aims to gather unique and impactful content for better SEO performance, enabling you to reach affiliation business approval and Google AdSense or other ad services.
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