Fractional Shares: What They Are And How To Buy

New investors may be surprised to see how expensive a single share of a stock or exchange-traded fund (ETF) can be. A single Class A share of Warren Buffett’s Berkshire Hathaway (BRK-A) sells for more than $767,000 as of May 2025, and the Class B shares (BRK-B) are more than $500 each.

But there’s good news for investors who may not be able to afford entire shares of certain companies or ETFs. Fractional shares allow you to invest a set dollar amount, rather than having to purchase whole shares.

Here’s what investors should know about fractional shares, including how to buy them.

What are fractional shares?

Fractional shares enable investors to purchase less than an entire share of a stock or ETF, which allows the full desired dollar amount to be invested, rather than only the amount that buys entire shares.

For example, say an investor wants to invest $1,000 in ABC stock that trades for $136 per share. If an investor had to buy only whole shares, they would be able to buy seven shares for $952 (excluding fees), and $48 would go uninvested. But fractional shares allow the entire $1,000 to be invested, resulting in 7.35 shares for the investor.

You may also see fractional shares if you reinvest dividends you receive back into a stock or fund. The dividends may not be enough to purchase an entire share, so you receive fractional shares instead. 

Who might want to buy them?

Fractional shares may be appealing to many different kinds of investors. Here are a few:

• New investors
  

  Fractional shares may be particularly appealing to new investors starting with small amounts of money. Rather than having to wait until you can buy full shares, any investor can get started right away, often with as little as $5.

• Investors with small amounts of money
  

  Fractional shares can also be useful to someone looking to build a diversified portfolio, but who may not have enough money to buy whole shares of many different stocks or funds.

• Nearly anyone
  

  Fractional shares can be beneficial to just about any investor, because they allow you to invest your full desired amount. It can be frustrating to watch cash sit in your brokerage account while you wait to have enough money to purchase another entire share. Fractional shares eliminate this issue in stocks and funds that allow for fractional share trading.

How to buy fractional shares

Fractional shares are available through most of the best online brokers these days, with top firms such as Charles Schwab and Fidelity Investments offering the feature, though Schwab only offers fractional shares of S&P 500 stocks.

Here are some of the best brokers for fractional shares. 

When you’re ready to place a trade order for either a stock or ETF, you’ll input the dollar amount that you’re looking to invest, rather than the number of shares you want to buy. Once the order is filled, you’ll see the fractional shares in your account. If you’ve set up your account to reinvest dividends, you’ll see your total shares grow as dividends are paid and new shares are purchased.

Bottom line

Fractional shares allow investors to purchase less than a full share of a stock or mutual fund so that their full dollar amount gets invested. Most major brokers allow you to buy fractional shares of stocks and ETFs, often with minimum investments of just $5. 

New investors who are starting with small sums may find fractional shares particularly useful because you can build a diversified portfolio without having to have a large amount of money to invest.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.