Fractional shares are partial shares of a company. They allow you to invest in a company without buying a whole share.
If the cake is a full share, a fractional share is a slice.
Let’s say you want to invest in a company but the share price is higher than you’d like to spend.
With fractional shares this problem is solved. You can buy a half, a quarter or even less of a share.
This way even the most expensive US stocks become affordable.
As with all investments, your capital is at risk.
Fractional shares work in a similar way to any other share, here’s a few common questions we’re asked:
When it comes to dividends, fractional shares are no different.
If a company pays a dividend, you’ll still receive it, but the amount will depend on how much of a share you own.
For example, if a company pays a $1 dividend and you own a quarter or 0.25 of a share, you’ll receive that amount as a dividend, so $0.25.
Once the company has paid the dividend, we’ll allocate your dividend to your Freetrade account.
Read more about how dividends are paid.
Flexible, unlimited investing. Commission-free share dealing.
Buy and sell shares instantly during stock market opening hours.
Invest tax-free with no UK capital gains or income tax. We charge a flat monthly fee and no commissions for placing trades.
Plus offers 3% interest on cash, up to a max deposit of £4,000, more order types with limit orders and stop losses, stocks and shares ISA, and more stocks.
When you invest, your capital is at risk
See our full pricing table.
A diversified portfolio is one that doesn't depend on one company or outcome to grow.
Instead of investing your money in one company, with fractional shares you can split the same amount of cash across different companies. This way, if one company or sector underperforms, your whole portfolio is not exposed and other holdings may even offset the poor performance.
A key benefit of fractional shares is that they offer a way to invest in companies that may otherwise be out of reach due to their share price. However, just like any other investment, a decision to invest should take into account your personal circumstances and goals.
Fractional shares are not the same on every investment platform.
Not every investment platform offers fractional shares and the fractional shares available might be different.
Fractional shares are calculated based on the latest share price and foreign exchange rate data at the time you place your order. When you place a trade, there will be a small amount of time between the estimate that you receive, the trade being executed in the market and the currency being exchanged to USD. This accounts for any differences in the number of shares you may receive.
No. Fractional shares are generally no harder to buy or sell than whole shares with Freetrade.
However, fractional shares are made possible by our US broker-dealer and that means orders execute slightly differently than orders for whole shares. In rare circumstances, this may make them harder to sell. For more info check out our T&Cs.
Fractional shares are taxed in the same way as other US shares and any tax you pay will also depend on which investment account you hold them in.
At the moment, if you want to transfer your fractional shares away from Freetrade you will have to sell them first and transfer the amount as cash.
At the moment, you can’t invest in fractional ETFs with Freetrade, you can only invest in fractional US shares.