Yes, Fidelity lets you buy fractional shares through most of its investment accounts
Fidelity offers fractional share purchases on stocks and exchange-traded funds (ETFs) through its standard brokerage accounts, retirement accounts, and automated investing services. You can buy a fractional share — say, 0.5 of a share or 2.3 shares — instead of being forced to buy whole shares only. This means you can invest a specific dollar amount rather than waiting until you have enough cash for a full share at its current price.
Fractional shares are available on most U.S.-listed stocks and ETFs. Some mutual funds and certain other securities do not support fractional purchases. Fidelity does not charge an extra fee to buy fractional shares, though you still pay the standard commission structure that applies to your account type.
Key Takeaways
- Fidelity allows fractional share purchases on stocks and ETFs in most account types, including taxable brokerage accounts and IRAs.
- You can invest any dollar amount you choose rather than waiting to afford a whole share, which is useful for dollar-cost averaging or small regular investments.
- Fractional shares trade at the same price per share as whole shares and settle in the same way.
- Dividend reinvestment plans (DRIPs) on Fidelity automatically buy fractional shares when your dividends are reinvested.
How to place a fractional share order on Fidelity's website or app
Log into your Fidelity account and navigate to the trade ticket. Enter the stock or ETF symbol. Instead of selecting "Shares" as your order type, select "Dollars" — this is the key step that lets you specify a dollar amount rather than a number of shares. Type the dollar amount you want to invest, for example $50 or $150.
Review the order summary. Fidelity will show you how many fractional shares that dollar amount will buy at the current market price. Select your order type (market order, limit order, or other options depending on what Fidelity offers for that security). Place the order during market hours or submit it for the next market open if you are trading after hours.
The order executes at the market price when it fills. You will see the fractional shares appear in your account holdings, listed with decimal places (for example, 2.347 shares). Fractional shares settle in the same way as whole shares — typically two business days after the trade date.
Which Fidelity accounts support fractional shares
Fractional shares are available in Fidelity taxable brokerage accounts, IRAs (Traditional, Roth, SEP, and straightforward), 401(k) rollovers, and Fidelity Go (the automated investing service). They are also available in custodial accounts for minors and in some employer-sponsored retirement plans that use Fidelity as the custodian.
If you hold fractional shares and transfer your account to another brokerage, the receiving firm may round your fractional holdings to whole shares or handle them according to their own rules. Check with the new brokerage before you transfer if fractional shares are a significant part of your portfolio.
Fractional shares and dividend reinvestment
When you enroll in Fidelity's Dividend Reinvestment Plan (DRIP) for a stock or ETF you own, dividends are automatically reinvested to buy more shares. If the dividend amount is not enough to buy a whole share, Fidelity buys a fractional share instead. This happens at no extra cost and is one of the most common ways investors end up holding fractional shares.
You can turn DRIP on or off for individual holdings in your account. If you turn it off, Fidelity deposits the dividend as cash instead. If you turn it back on later, reinvestment resumes with the next dividend payment.
What happens when you sell fractional shares
You can sell fractional shares the same way you sell whole shares — through the trade ticket, using the "Dollars" order type or by specifying the exact number of shares (including decimals) you want to sell. The sale executes at the market price for that security, and you receive the proceeds in your account cash balance.
If you own 2.347 shares of a stock and want to sell all of them, you can enter 2.347 in the shares field, or you can use the "Dollars" order type and let Fidelity calculate how many fractional shares that dollar amount represents. Either way, the order settles in two business days.
Fractional shares and taxes
Fractional shares are treated the same as whole shares for tax purposes. When you sell a fractional share, you report the gain or loss based on the sale price minus your cost basis. If you hold fractional shares in a taxable account and they increase in value, you owe capital gains tax when you sell — short-term if you held them less than a year, long-term if you held them a year or more.
In a retirement account like a Traditional or Roth IRA, fractional shares grow tax-deferred (or tax-free in a Roth), and you do not report gains until you withdraw from the account. Keep records of your fractional share purchases so you can calculate your cost basis accurately when you sell.
Fractional shares and stock splits or corporate actions
If a company you own fractional shares in announces a stock split, your fractional holdings adjust automatically. For example, if you own 0.5 shares of a stock that splits 2-for-1, you will own 1 share after the split. The total value of your position stays the same; only the number of shares and the price per share change.
Other corporate actions like mergers, spinoffs, or special dividends may affect fractional shares differently depending on the specific event. Fidelity will notify you of any changes to your holdings and explain how the action affects fractional shares you own.
Frequently Asked Questions
Can I set up automatic investments in fractional shares on Fidelity?
Yes. Fidelity's Automatic Investment Plan (AIP) lets you invest a set dollar amount in a stock or ETF on a regular schedule — weekly, biweekly, or monthly. The system buys fractional shares if needed to match your dollar amount exactly. This is a common way to dollar-cost average without worrying about whole share prices.
Do fractional shares have voting rights?
No. Fractional shares do not carry voting rights in shareholder meetings. Only whole shares vote. If you own 2.347 shares, you can vote on matters affecting the 2 whole shares, but the 0.347 fractional share does not vote.
What if Fidelity stops offering fractional shares?
Fidelity has offered fractional shares for years and shows no sign of stopping, but if the policy changed, you would be notified in advance. You would have time to sell your fractional shares or convert them to whole shares before any change took effect.
Can I buy fractional shares of mutual funds on Fidelity?
Most Fidelity mutual funds already allow you to invest any dollar amount, so fractional share purchases are built in. You do not need to specify "Dollars" — you straightforward enter the dollar amount you want to invest, and Fidelity calculates the fractional shares automatically. Some mutual funds have minimum investment amounts, so check the fund details before you invest.
Are there any restrictions on which stocks I can buy fractional shares of?
Fractional shares are available on most U.S.-listed stocks and ETFs. Some penny stocks, very new IPOs, or securities with low trading volume may not support fractional purchases. Fidelity will let you know during the order process if a security does not support fractional shares.