Robinhood was one of the first online brokerages to offer commission-free trading. Now that its innovation has spread across the investing world, Robinhood is setting its sights on another frontier: fractional shares of stock.
Though you can currently only join the waitlist, there’s no cost to join or obligation to participate once it’s rolled out. In the meantime, enjoy fantastic features like a high-yield cash management account and access to alternative investments like cryptocurrencies and precious metals.
Stash is a micro-investing platform built around the concept of fractional share investing. The most significant difference between Stash and competitors like M1 Finance and Betterment is its self-directed approach that gives investors — even those just starting — total control over their portfolios’ composition.
All Stash plans come with a taxable investing account and a checking account with two great features: fractional stock rewards on all eligible transactions and an accelerated payday feature. If your employer qualifies for the payday feature, you could get your paycheck up to two days early each pay period.
Higher-priced Stash plans offer tax-advantaged retirement accounts and custodial investing accounts for up to two kids. Both types offer fractional investing as well.
Stash’s Auto-Stash feature is available at all price points. It offers three features that promote regular investing: recurring investment settings (usually weekly or monthly), a round-up-the-change feature that rounds every checking debit card purchase to the nearest dollar and invests the difference, and a smart investing tool that automatically moves excess funds from your checking account to your investing account.
For more information, check out our Stash review.
Webull is another increasingly popular online brokerage with no stock trading commissions or management fees. It’s also one of the best places to buy and sell fractional shares of top stocks and ETFs.
Webull allows fractional share purchases for as little as $5 (minimum 0.00001 shares per order), making it easy to own smaller slices of stocks with higher share prices.
You can also buy options and cryptocurrencies here, enabling all-important portfolio diversification without opening yet another brokerage account.
Public is a social investing platform that puts fractional shares at the heart of its operations.
Users can invest directly (and commission-free) in “stock slices” worth as little as $5 apiece, regardless of the price of the underlying shares, and Public promotes socially responsible investing — both critical selling points for younger investors.
If you’d prefer not to invest in individual stocks, Public offers a range of low-cost index funds with no commissions. Once you’re up and running, use Public’s social messaging tool to stay in touch with your fellow investors and discuss your investments.
The investing solution, known as M1 Invest, offers dynamically rebalanced, fully customizable portfolios with built-in fractional share investing in more than 80 ETFs.
M1 Finance’s big selling point relative to other digital investing platforms is M1 Borrow, a portfolio lending tool that offers very low-cost financing secured by the value of the account holder’s investment portfolio.
When you upgrade to M1 Plus ($125 per year), you unlock M1 Borrow loans at just 2% APR — a better deal than home equity loans and lines of credit and roughly equivalent to the lowest auto loan rates available.
If you don’t own your own home or have yet to accumulate the equity necessary for home equity financing, M1 Borrow could be your best shot at unlocking substantial sums of low-cost capital.
Founded during the depths of the late-2000s financial crisis, Betterment is the original robo-advisor and one of the first online investing platforms to offer fractional share investing to the masses. It remains a leader in the managed investing space, specializing in tax-optimized, custom-allocated portfolios for passive investors.
Betterment’s purpose-built portfolios contain low-cost ETFs that track specific indexes, sectors, and asset classes. Fractional share investing is built into its investing model thanks to unlimited portfolio rebalancing and automatic dividend reinvestment features that spread relatively small sums of cash among multiple securities.
Betterment keeps net costs low by waiving transfer and trading fees — the only fees you pay are its flat management fee calculated as an annualized percentage of assets under management (AUM) and fund expenses that Betterment can’t control.
Betterment also offers two daily money management tools: Betterment Checking, which has a potentially generous rewards program (Betterment Cash Back Rewards); and Betterment Cash Reserve, which has a high yield for a cash management account (though it’s variable with prevailing rates).
Both are FDIC-insured, basically fee-free, allow unlimited inbound and outbound transfers, and charge virtually no fees. You can transfer money from these accounts into your investing account at any time.
Fidelity is a full-service online stock broker with commission-free stock and ETF trades with fractional share investing capabilities, a robo-advisor platform with relatively low fees and no minimums (and fractional shares), and a hands-on wealth management arm (also with fractional shares) for investors who can bring at least $50,000 in investable assets to the table.
Fidelity has a vast library of no-fee Fidelity ETFs for self-directed investors looking to skip out on fund fees and build truly fee-free portfolios. For hands-off investors, there’s the Fidelity Go robo-advisor and the Fidelity Personalized Planning & Advice hybrid platform instead.
Both offer semicustomized portfolios built around your specific objectives and risk tolerance. Both also offer some input from human advisors and dynamic rebalancing using fractional shares.
SoFi Invest is a very low-cost investing app with a massive cache of fractional shares, known at SoFi as Stock Bits, in denominations starting at $1. New investors can easily build diversified self-directed (Active Invest) portfolios using only Stock Bits.
Stock Bits are also integral to SoFi Invest’s managed portfolio solution, which offers dynamic rebalancing and dividend reinvestment, both made possible with fractional shares.
Active Invest portfolios charge no commissions on stock or ETF transactions. SoFi’s managed portfolio’s solution is management fee-free, though the funds in which SoFi invests charge management fees over which SoFi has no control.
Although it doesn’t really intersect with the platform’s fractional share investing capabilities, SoFi Invest does have a significant advantage over more traditional brokerages: cryptocurrency investing. SoFi Invest remains one of the few SIPC-insured investing platforms to offer crypto access.
Stockpile is a low-cost self-directed investing platform that offers direct access to fractional shares in more than 1,000 stocks and ETFs, with no fees or minimums.
The platform is for novice investors looking to invest in companies they patronize or care about. Its innovative stock search feature is smart enough to serve up parent companies of popular brands (for instance, a search for “ESPN” pulls up Disney).
Stockpile has some other features worth noting, including custodial investment accounts for kids and teens and the ability to give stock to others via electronic or physical gift cards.