How to Buy Fractional Shares on Fidelity Investments

One of the basic tenets of investing is to diversify your portfౠolio in order to hedge against market risk. This can be hard to do if you are just starting out or have a limited amount of money to invest.

However, investing in fractional shares through online brokers opens up opportunities to purchase portions of higher-priced stocks with the money you have on hand. We’ll take a deep dive into how investing in fractional shares works at Fidelity and ansꦇwer the basic questio♚ns needed to help you decide if this approach is right for you.

Key Takeaways

Fidelity offers fractional shares for over 7,000 U.S. stocks and ETFs, making it easier for investors to diversify their portfolios with lower investments.
Investors can buy fractional shares starting at as little as $1, and there are no account fees or minimums for opening a retail brokerage account.
Fidelity provides a user-friendly platform, offering educational resources and research tools to help investors make informed decisions.
Fractional shares allow for dollar-cost averaging, providing smaller investors with the ability to gradually build a diversified portfolio without needing large sums of money upfront.

How to Buy Fractional Shares on Fidelity

Buying fractional shares at Fidelity is quite simple. Investors have access to more than 7,000 U.S. stocks and ETFs for fractional share trading. Fidelity offers several types of accounts that investors can use to buy fractional shares and makes it easy to start investing with low fees and low minimum investment requirements.

Step 1: Open a Fidelity Account

Opening an online account a🍸t Fidelity is quick and easy. You will need to provide your basic personal information and select the type of account that you w✅ant to open.

Step 2: Log Into Your Fidelity Account

Once you have opened an account with Fidelity, you will need to log in and fund your account. Rememb💮er, fractional share trading takes place in real-time, so the funds will need to be settled and available in your account in order to place a trade.

Step 3: Click the “Trade” Tab

The “trade” tab is at the top le🍌ft of your Fidelity dashboard. Once you click on “trade,” a dropdown menu will open with a form to fill out regarding what type of trade you’d like to make.

S🌃tep 4: Change the Setting From “Shares” to “𓃲Dollars”

By selecting the “Dollars” setting, you will be able to buy fractional shares. This will base your order on a specific dollar amount, instead of buying a specific number of shares. Dollar amounts can be entered out to two decimal places, for example, $50.75. The order is then converted into shares out to three decimal places and rounded down to the nearest decimal.

Step 5: Submit Your Order

Fractional share orders are entered as market orders or 澳洲幸运5开奖号码历史查询:limit orders and are only good for the day. At 🅠the bottom of the trading form, you will then click “Preview order.” This will lead to a confirmation screen where you can edit, cancel, or place the orꦜder. Fractional share trading is done in real-time, during market hours, so you will know your share price.

Compare Some Top Online Brokers

Below is a comparison of Fidelity with other brokers.

Broker	Minimum Deposit	Stock Trades	Per Contract Options	Fractional Share Trading
Fidelity	$0.00	$0.00	$0.65	Yes
Interactive Brokers	$0.00	$0.00	$0.65	Yes
TastyTrade	$0.00	$0.00	$1.00/Open Only	No

What You Need to Open a Fidelity Brok♐era🦋ge Account

To open your new account at Fidelity, you will need to provide your basic personal and financial information. You can also choose the type of account that you’d like to open, depending on your financial investing needs and goals. The following Fidelity retail accounts are approved for buying fractional shares:

Standard brokerage accounts
Individual retirement accounts
Youth account
Health savings accounts (HSAs)
BrokerageLink accounts (offered through some employer plans)

Personal Information

When opening your account online, you will be as♍k🔴ed to provide personal and contact information:

Full name
Address
Social Security number
Date of birth
Phone number
Email address

Financial Information

Besides providing your personal information, you will be asked to provide your financial information. This will include particulars regarding your current financial situation, as well as your investing goals. These are the “澳洲幸运5开奖号码历史查询:know your client” questions that Fidelity must ask to ensure you’re being matched to investm🍰ents that are appropriate for your financial situation and risk tolerance.

As part of this process, you may even choose to link your current bank account or use mobile deposit in order to fund your Fi🌊delity account more quickly. That said, sending a check in the maiཧl is also an option.

The Benefits of Trading on Fidelity

There𝓡 are several benefits of opening an account and trading fractional shares at Fidelity:

Offers over 7,000 U.S. stocks and ETFs for fractional shares trading
Direct indexing, via Fidelity Managed FidFolios, uses fractional shares with ownership of the actual stock rather than an ETF
Committed to eliminating common account fees
User-friendly account features and strong portfolio analysis
Excellent order execution
Dynamic Active Trader Pro platform
Upgraded mobile experience
Redesigned app dashboard

One of the key benefits of investing with Fidelity is that it offers over 7,000 U.S. stocks and ETFs for fractional share trading. Some brokers only offer a handful of stocks to choose from for this type of investing, so Fidelity gives you a larger chunk ༺of the market to worღk with.

Fidelity has long been recognized as a leader in the industry for its low-cost fees and for delivering value to customers. Fidelity has continued to improve and offers new products to investors as markets have developed. Fidelity has introduced exposure to crypto and digital payments, in addition to stocks, bonds, ETFs, and fractional share trading.

Fidelity does all thi♒s through a user-friendly desktop platform and mobile experience for investors, and effectively uses dashboards to make it easier for investors to keep up-to-date on their accounts and their💫 progress towards financial goals.

Important

Fraction꧙al shares may complicate tax reporting, as each sale can t🎀rigger taxable events based on share allocations.

Factors to 𓆉Consider When Investing in Fractional Shares

Selection of Available Stocks and ETFs

Fidelity has a wide selection of stock and ETF offerings for fractional share investing, making over 7,000 shares available for dollar-cost averaging via fractional shares. One unique product that Fidelity offers is FidFolios, which enables investors to construc💙t their own customized index of stocks and ETFs.

Fees and Commissions

Getting started at Fidelity is made simple with $0 commissions for online U.S. stock and ETF trades. There a🐼re also no account fees or minimums to open a retail brokerage account.

Account Minimums

Investors at Fidelity can buy fractional shares for as low as $1 and there is no minimum to open a self-managed investment account. Investing in Fidelity Managed FidFolios does require a $5,000 minimum, though.

Research Amenities

Once you open an account with Fidelity, you will have access to research amenities right from your account dashboard. Investors can access a plethora of research and news from the “News & Research” tab at the top of the dashboard, with a dropdown menu offering information on💃 the latest news, watch lists, quotes, alerts, and much more.

Educational Content

Knowing how to invest, what to invest in, and how to reach your 澳洲幸运5开奖号码历史查询:financial goals are i🃏mportant, and the educational content provided by Fidelity can help you do just that. Investors can utilize the “Planning & Advice” tab on their dashboard to become mor𒁏e informed investors.

Investors can find articles and information on topics ranging from investing basics to long-term care planning. Account users will also find it easy to access informa♓tion regarding s🌟tocks, mutual funds, or ETFs in which they would like to invest, as well as other investment vehicles.

What Are Fractional Shares?

Investing in fractional shares helps you to easily diversify your portfolio and invest in companies that you may otherwise not be able to afford. Fractional shares—or “Stocks by the Slice,” as Fidelity calls them—allow investo🙈rs to buy a fraction of a whole share of a stock. With this strategy, you are investing based on a dollar amount, not an individual stock’s price or a certain number of shares.

Buying fractional shares provides investors with a lower entry point of accessibility, thereby allowing investors to gain market entry sooner. It also allows you to employ dollar-cost averaging across a basket of larger stocks that you would otherwise have to save up to slowly accumulate shares. The ability to dollar-cost average into an ETF, for example, gives smaller investors the same advantages that large-scale investors enjoy in terms of 澳洲幸运5开奖号码历史查询:diversification.

What Is Fidelity?

Fidelity is the largest U.S. brokerage, was founded in 1943, and is headquartered in Boston. The company has $15 trillion in assets under administration and $5.8 trillion in discretionary assets.

Fidelit﷽y has been able to use its economies of scale to continue to offer compe🧸titive products and services while maintaining a low-fee structure for clients.

Although it is undoubtedly a large, traditional brokerage, Fidelity has been able to 澳洲幸运5开奖号码历史查询:remain at the ๊forefront of the industr✃y by embracing technology and launching new products and services including 澳洲幸运5开奖号码历史查询:digital investment management, crypto and✱ digital payments, Active Tradeꦇr Pro, and the Fidelity Metaverse.

Do Fractional Shares Make You Money?

As with any investment, fractional shares have the potential to both make and lose money, depending on the market performance of the asset you are investing in. Investing in fractional shares is a good way to 澳洲幸运5开奖号码历史查询:dollar༺-cost average your money into the market. If you are investing on a regular basi🎃s, you will be buying “slices” ♛of several stocks over time.

This will not only allow you to take advantage of dips in the market when buying but over time, will enable you to build a portfolio that consists of full shares of multiple stocks. The key difference is that this portfolio w𝔉ill be diversified throughout the whole accumulation stage rather than only growing in diversification as your♎ account balance grows.

Can You Buy Exchange-Traded Funds (ETFs) As Fractional Shares?

Yes, Fidelity o🦋ffers ETFs as fractional shares. Fidelᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚity offers investors over 7,000 choices of individual stocks and ETFs to buy as fractional shares.

Fidelity also offers FidFolios, which allows you to create your own customized index o൩f stocks and ETFs. This specialized product does require a $5,000 minimum investment, though. However, you can start investing in fractional shares of individual stocks and ETFs for just $1.

Are Fractional Shares Harder to Sell?

Fidelity offers investors real-time trading during market hours. It is possible that fractional shares for certain securities may not be liquid and National Financial Services (NFS), which acts in a mixed capacity (as principal for the fractional share components and as agent for the whole share components) will not be able to guarꦓantee a market for the security. Frac𒆙tional shares are also not able to be transferred, so any fractional share would need to be sold prior to a transfer taking place. On the whole, however, fractional shares of larger, liquid stocks are just as easy to sell as their whole counterparts.

The Bottom Line

Investing in fractional shares through platforms like Fidelity offers a practical way for investors with li🐠mited funds to diversify their portfolios. The process is simple and involves opening an account, fundi🐽ng it, and placing trades based on dollar amounts.

While fractional shares provide easier market entry, they come with certain limitations, such as liquidity issues and non-transferability; however, Fidelity's user-friendly platform, low fees, and educational resources make it a strong choice for beginners looking to diversify their investments.

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