The Best Places to Buy Fractional Equity Shares

Dan is a lawyer and financial planner. He has been writing since 2006 and covers topics ranging from investing and tax planning to personal finance.

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Many beginning investors struggle to come up with money to buy stocks. Most brokers let you open accounts with small deposits, but expensive shares mean you won’t be able to buy much. Many companies have shares that cost hundreds or thousands of dollars -- if you only have $50 or $100 every month to invest, what can you do?

Fractional shares solve this problem. You can buy into stocks that would otherwise be out of your budget. You’ll need to find the right broker to do this, so we’re going to share the four best places to buy fractional shares.

Service Pricing Trade Frequency Other Features
Stockpile $0.99 per trade Once daily Educational resources, stock gifts, no monthly account fees
M1 Finance No commission; M1 Plus fee $100/yr One to two windows per day Margin loan and checking account services
Motif $0 to $19.95 per trade; 0% to 0.50% per year for company-provided portfolios Real-time or delayed Blue subscription offers some free trades for $19.95 per month
Folio Investing $3 to $10 per trade Two windows per day 2,000 no-cost trades for subscribers paying $29/month or $290/year

What is a fractional share?

A fractional share is a position in a stock equal to less than a whole share. The fraction is between 0 and 1. You’ll often see half-shares after stock splits. Companies sometimes offer 1.5 or 2.5 new shares for every existing share, resulting in fractional shares.

But fractional shares can be smaller, too. Many companies calculate them down to thousandths or even ten-thousandths of a share.

Historically, companies issued whole shares. Exchanges also required trading in whole shares. In fact, throughout much of the history of the stock market, investors were encouraged to trade stocks in 100-share lots.

It was only with the advent of online brokers that buying and selling fewer than 100 shares at a time became common. Now transactions often involve single shares.

The idea of fractional shares isn't new. Even though exchanges didn't allow fractional shares to trade, many companies used them in shareholder reinvestment plans. Dividend reinvestment programs allowed shareholders to purchase additional stock with dividends. Because the dividend often wasn't enough to buy a full share, companies would keep fractional shares in their internal records.

Why buy fractional shares?

The dividend situation above is a good example of when it's useful to buy fractional shares, but it's far from the only one.

It used to be that most stocks traded for $100 per share or less. When prices went above that mark, companies tended to split their stock. That resulted in more shares at a lower price, making them more affordable.

Today, stock splits have almost disappeared. And shares in popular companies might cost hundreds or thousands of dollars. Most financial institutions still let you open a brokerage account with $50 or $100 a month. But at this rate it could take months to come up with the cash for a single high-priced share.

Unless you go with a company that will let you buy fractional shares.

Who should buy fractional shares?

Fractional shares work well for any investor. Putting all your money into stock means you don’t have extra cash sitting in your brokerage account. That’s easier to do with fractional shares.

Just about the only downside is that tracking fractional shares is complicated, especially compared to dealing in round numbers like 100-share lots.

Fractional shares are especially important for investors who don’t have the money to buy individual stocks. Not only do they give you access to the higher-priced stocks that you'd otherwise be unable to afford, but they also let you spread modest amounts of savings across a larger number of stocks. That gives you access to a diversified portfolio with less risk than a portfolio of one or two stocks.

How to buy fractional shares

The most challenging part of buying fractional shares is finding a brokerage that lets you do so. Many institutions recognize fractional shares from dividends or splits, but most major brokerages don't have a fractional share program. But there are some brokerage companies that offer fractional shares to their investors.

If you want to buy fractional shares of a single stock, two brokers stand out:


Stockpile lets investors buy fractional shares of more than 1,000 different companies and exchange-traded funds (ETFs). You can start with as little as $5. Signup is free, and commissions are just $0.99 per trade. There are no monthly account fees or a minimum trading volume.

The Stockpile app has mini-lessons for investors who need educational support, and kids and teens can get started with accounts that parents oversee. You can also gift stock through the service.

One negative of Stockpile is that it doesn’t offer immediate trading. Instead, it aggregates orders placed before 3 p.m. and executes them before the market closes at 4 p.m.

M1 Finance

M1 Finance goes a step further than Stockpile with no commissions. M1’s platform offers fractional shares of any investment and allows you to choose from more than 80 expert portfolios or create your own.

The platform goes beyond simply buying shares. There’s a margin loan service that lets you borrow up to 35% of the value of your investment portfolio without credit checks or loan applications. You can also open an M1 checking account that integrates spending and money management into M1’s app.

The downside for M1 is that trades occur only during a single trading window each day (much like Stockpile). Upgrading to M1 Plus gives you access to a second trading window, interest on checking accounts, and lower borrowing rates. But it comes with an enrollment fee of $100.

If you want to split your money across multiple stocks with fractional shares, two other brokers stand out:


Motif lets you invest in set portfolios with investment themes. When you invest in a given theme, your money is divided across a number of stocks. You then own fractional shares of each stock in that portfolio.

However, Motif has a $250 minimum investment for customers, and costs are higher. Some of the Motif portfolios have annual fees of 0.25% to 0.50% of the amount invested. Trading fees of $4.95 to $19.95 will apply to portfolios that you build yourself. The cost depends on whether you structure it as an automatic investment and whether you want real-time or delayed trade execution. Individual stock and ETF trades are available free if you’re willing to wait until the next market open, or for $4.95 in real time.

Motif’s Blue subscription offers three real-time trades and five next-market-open trades for $19.95 per month.

Folio Investing

Folio Investing has a similar setup. The service offers specialized folios of up to 100 stocks, funds, and ETFs you can buy or sell in a single transaction. The service reduces costs by using window trading, with two windows each day at 11 a.m. and 2 p.m.

The basic plan charges a $4 commission per stock using these window trades, or you can pay $10 per trade for regular orders. The unlimited plan offers up to 2,000 window trades at no additional cost and reduced $3 commissions for regular orders, with a current subscription price of $29 per month or $290 per year.

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