What’s a Fractional Share and Why Should I Care About It?
Just like you no longer have to go to a brick-and-mortar broker to buy a stock, you no longer need to have the whole price of a share on hand in order to start investing. Learn more about how investing has become even more accessible in recent years.
Bottom Line Up Front
- You don’t have to buy a full share of a stock. You can invest by buying fractional or partial shares. This allows you to invest in pricier stocks without the price of one whole share saved upfront
- Buying fractional stock for as little as $1 with a tool like Navy Federal's Digital Investor allows you to start investing sooner, while also riding the upward trend of more expensive stocks more easily.
Time to Read
2 minutes
June 27, 2022
Did you know you don’t have to buy full shares of stock? It’s true. Some brokerage services will allow you to buy fractional shares in some of your favorite companies.
There are a number of reasons why many investors want to buy fractional shares. Suppose you’re just getting started and would like to see how a company performs before you commit more money? Or maybe your investing capital isn’t as big as you’d like it to be so for now, you only want to invest small amounts. That’s where buying fractional shares can be a game-changer.
A fractional (partial) share is what it sounds like—you buy a fraction of a share instead of a whole share. It’s a great way to get into investing without committing a lot to any one stock. Plus, it allows you to invest in pricier stocks that you might not be able to afford otherwise. Even better, you’re treated the same as an investor who owns a full share. And, as the stock goes up, your earnings will go up, too.
It's really very simple—let’s say you’d like to buy a stock, but one share of it costs $500. You only have $300 you’re willing to invest. You buy $300 worth of that stock, and now you own 0.60 shares of it. If the stock moves higher, so will the $300 you’ve invested. Now you’ve got skin in the game!
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Disclosures
Navy Federal Financial Group, LLC (NFFG) is a licensed insurance agency. Non-deposit investments, brokerage, and advisory products are only sold through Navy Federal Investment Services, LLC (NFIS), a member of FINRA/SIPC and an SEC-registered investment advisory firm. NFIS is a wholly owned subsidiary of NFFG. Insurance products are offered through NFFG and NFIS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of Navy Federal Credit Union (NFCU), are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. Deposit products and related services are provided by NFCU. Financial Advisors are employees of NFFG, and they are employees and registered representatives of NFIS. NFIS and NFFG are affiliated companies under the common control of NFCU. Call 1-877-221-8108 for further information.
Navy Federal Financial Group, LLC (NFFG) is a licensed insurance agency. Non-deposit investments, brokerage, and advisory products are only sold through Navy Federal Investment Services, LLC (NFIS), a member of FINRA/SIPC and an SEC-registered investment advisory firm. NFIS is a wholly owned subsidiary of NFFG. Insurance products are offered through NFFG and NFIS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of Navy Federal Credit Union (NFCU), are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. Deposit products and related services are provided by NFCU. Financial Advisors are employees of NFFG, and they are employees and registered representatives of NFIS. NFIS and NFFG are affiliated companies under the common control of NFCU. Call 1-877-221-8108 for further information.
This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.