{"id":316875,"date":"2020-06-24T17:00:50","date_gmt":"2020-06-24T16:00:50","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=316875"},"modified":"2026-02-23T10:47:13","modified_gmt":"2026-02-23T10:47:13","slug":"fractional-shares","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/share-trading\/invest-in\/fractional-shares","title":{"rendered":"How to invest in fractional shares"},"content":{"rendered":"

Sometimes, a single share in a company can set you back thousands of pounds (or dollars). Not ideal if you\u2019re investing on a budget. That\u2019s where fractional shares come to the rescue. <\/p>

By breaking down stocks into smaller pieces, it gives you the opportunity to invest in portions of whole shares. Find out how this works, why they\u2019re useful, and how to start investing in fractional shares.<\/p>

What are fractional shares?<\/h3>

When you buy shares in a company<\/a>, you\u2019re buying a slice of ownership. A fractional share simply divides the ownership further. The original slice was the full \u201cshare\u201d, but if you break down that share further, you\u2019ll end up with fractional stock ownership.<\/p>

Sometimes fractional shares are created accidentally, such as with a dividend reinvestment plan (DRIP)<\/a>, stock splits<\/a> or mergers<\/a>. Other times, the splitting is completely intentional, and done by a brokerage. This feature is quite new in the investing world and only on offer with some of the best trading platforms<\/a>.<\/p>

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\n \n \n <\/circle>\n <\/path>\n <\/svg>\n <\/span>\n What is a dividend reinvestment plan?<\/span>\n <\/h4>\n
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A dividend reinvestment plan (DRIP) is when you agree with your broker that they will reinvest the dividends you receive to buy more shares.<\/p>\n <\/div>\n <\/div>\n<\/div>\n

How to invest in fractional shares<\/h3>
  1. Find a share dealing account.<\/strong> You\u2019ll need one that lets you invest in fractional shares. Take a look at our list below<\/a> and read our reviews to make sure they suit your needs.<\/li>
  2. Sign up and fund your account.<\/strong> You\u2019ll need to provide some personal details and information before depositing money into your account. <\/li>
  3. Find a fractional share. <\/strong> Research some of the stocks you\u2019re interested in and find them on your chosen platform.<\/li>
  4. Choose how much you want to invest. <\/strong>Typically, you type in how much you want to invest and the provider will show you how much of a share that equates to.<\/li>
  5. Hit buy. <\/strong> It\u2019s as easy as that! Keep in mind, buying fractional shares is often just for US stocks.<\/li><\/ol>

    How much do fractional shares cost?<\/h3>

    The cost of your slice of the company pie depends on the size of the company and the cost per share. For example, if you want to buy a 50% share of a \u00a3100 stock, this will cost you \u00a350. But if you wanted to spend \u00a375 on the same stock, you\u2019d have a fractional share worth 75%.<\/p>

    Why buy fractional shares?<\/h3>

    When a company or broker offers fractional shares, it\u2019s allowing you to get access to stocks and shares that you might not usually have access to due to the cost of a single share.<\/p>

    If your broker allows you to purchase fractional shares, it doesn\u2019t really matter how how the price of a single share is. Fun fact \u2013 Berkshire Hathaway (BRK.A), Warren Buffett\u2019s investing company, has the most expensive share price in the world. At the time of writing, a single Berkshire Hathaway Class A shares costs over $600,000 (roughly \u00a3475,000)!<\/p>

    Fractional shares also allow investors with limited funds to start investing. One of the best ways to manage risk in a portfolio is to diversify. A difficult task if you can only afford one share. Buying fractional shares allows you to split your funds across a portfolio of companies on a smaller scale.<\/p>

    Here\u2019s the fractional shares highlight reel:<\/p>