Fractional shares: definition and how to invest

What are fractional shares?

Fractional shares are parts of whole shares. Instead of buying one full share of a company, you can own a portion of one. This makes it easier to invest small amounts, especially in stocks with high prices. They also offer the same growth potential as regular shares, with more flexibility and lower barriers to entry.

For example, if one share of Alphabet (Google) costs $140, you can invest $14 and receive 0.1 of a share. You still get the same percentage of returns, including dividends, based on your ownership.

Fractional shares offer access to the same assets as full shares. You can buy fractions of individual stocks like Apple, Amazon, or Tesla. You can also invest in fractional ETFs (exchange-traded funds), which group together multiple companies into a single product.

The main difference is how you buy them. With full shares, you must invest the entire market price of one share or more. With fractional shares, you decide the dollar amount – the platform automatically calculates how much of the share you’ll own.

How do fractional shares work?

Fractional shares enable you to invest with exact dollar amounts. Instead of choosing how many shares to buy, you choose how much money to invest. The platform handles the math, giving you a precise slice of a stock or ETF.

Once you invest, that fraction acts just like a full share. If the stock price increases, your portion increases in value too. If it pays a dividend, you receive a proportional payment based on your share size.

These small, automatic calculations happen behind the scenes, making it simple to invest without manually tracking numbers or percentages.

Crypto.com Stocks shows your fractional ownership clearly in the App. You can see how much of each asset you own, monitor its performance and review dividends or market movements – all in real time.

Because fractional shares operate on a dollar-based system, they are especially effective for setting up recurring investments. This is known as dollar-cost averaging (DCA). You invest the same amount regularly, regardless of the current market price.

Over time, this strategy helps you smooth out the effects of volatility and stay consistent in your approach. It removes the need to time the market or second-guess entry points.

Fractional investing is also supported within Crypto.com Stock’s zero commission stocks experience, so every dollar you invest goes straight to work.

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Benefits of investing in fractional shares

1. Accessibility and affordability
As mentioned, fractional shares remove the cost barrier. Instead of waiting to afford full shares, you can begin investing right away, even with a small budget. You decide the amount, whether it's $5 or $50. This makes investing far more inclusive for beginners and younger investors.

2. Diversification with smaller budgets
Diversification is no longer limited to large portfolios. Fractional investing enables you to spread your money across multiple companies or sectors, even if you’re starting small. This lowers your exposure to risk from any single stock and makes it easier to follow a balanced strategy.

3. Opportunity to invest in high-priced stocks
Stocks like Amazon, Tesla or Alphabet can be too expensive to buy whole. Fractional shares make these companies accessible. You can build a portfolio that includes well-known leaders without needing hundreds of dollars for each trade.

4. Ease of dollar-cost averaging (DCA)
Fractional shares pair perfectly with recurring investment plans. You can automate purchases by dollar amount instead of waiting for exact share prices. This supports a consistent, long-term investing habit and helps reduce the impact of short-term market swings.

5. Simplified decision-making
Fractional shares eliminate the pressure of choosing one stock over another. Instead of all-or-nothing decisions, you can distribute your capital across multiple opportunities at once – one small amount at a time.

Considerations before investing in fractional shares

While fractional shares are powerful, they aren’t perfect. Here are a few things to keep in mind:

1. Dividend reinvestment
If a company pays dividends, your fractional share earns a proportional amount. But not all platforms enable you to automatically reinvest those dividends unless you set it up.

2. Not available everywhere
Fractional investing is growing in popularity but isn’t yet supported by every broker or in every market. Make sure you’re using a trusted provider like Crypto.com Stocks that offers this feature.

3. You may not get voting rights
Owning a partial share might not entitle you to vote in shareholder meetings, depending on how the platform structures ownership.

4. Order execution timing
Some brokers may group fractional trades and execute them only at certain times, rather than in real time. This can lead to slight price differences between your order and the final trade.

5. Tax tracking
Even small transactions generate tax implications. You’ll still owe taxes on gains and dividends, so make sure you understand how your provider reports this, especially if you’re investing frequently in small amounts.

6. Learning curve
Fractional investing is simple, but the concept is still new to many. Beginners may confuse fractional ownership with reduced value, so it’s worth learning how fractions behave in a real portfolio.

How to invest in fractional shares with Crypto.com

Getting started with fractional investing on Crypto.com Stocks is simple, fast and beginner-friendly. Here’s how to set up your account and make your first investment in just a few steps:

1. Sign up or log in to Crypto.com Stocks account
2. Deposit money into your Stocks account
3. Find stocks you’re interested in
4. Choose your stock or ETF
5. Confirm and invest
   

1. Sign up or log in

Start by downloading the Crypto.com App and creating an account. Then, set up your Crypto.com Stocks account. If you already have these accounts, just log in. The app is free to use and trusted by more than 150 million users worldwide. Account setup includes identity verification, two-factor authentication and bank-level security.

2. Deposit money into your account

Next, you’ll need to fund your Stocks account. You can deposit using bank transfer, debit or credit card, Apple Pay or Google Pay, whatever works best for you. Funds are typically available quickly and Crypto.com ensures all transactions are safe. You can learn more about available funding options on the secure deposits page.

3. Find stocks you’re interested in

Once your account is funded, open the App and tap the ‘Trade’ button in the bottom menu. Then select the ‘Stocks’ tab. Here you’ll find access to over 10,000 US stocks and ETFs, including companies like Apple, Tesla, Nvidia and S&P 500 trackers.

4. Choose your stock or ETF

Use the search bar to find a stock or ETF you want to invest in. Instead of entering a number of shares, just type the dollar amount you'd like to invest, even if it’s just $1. The App automatically calculates how much of the share you’ll receive.

5. Confirm and invest

Review your purchase details and confirm the transaction. Once completed, your fractional shares will appear in your portfolio. You’ll be able to track performance, view dividends and monitor your overall allocation right in the App.

Crypto.com Stocks offers zero commission stocks and ETFs, so your full investment goes to work from the start. No need to do complex calculations – the platform handles everything behind the scenes.

Explore the ins and outs of how to buy shares

Fractional shares investing tips

Here are a few practical tips to help you get the most from your fractional investing journey:

1. Start small and grow steadily: You don’t need to wait until you’ve saved up a large amount. Start with what you have and scale up as you gain confidence.

2. Use dollar-cost averaging (DCA): Investing a fixed amount on a regular schedule helps smooth out price fluctuations and builds discipline.

3. Reinvest dividends: If your investments pay dividends, consider reinvesting them. Over time, this can accelerate your portfolio’s growth, especially when compounded.

4. Don’t chase high prices: Just because you can afford a fraction of an expensive stock doesn’t mean it’s the right fit. Look for companies with strong fundamentals, not just big price tags.

5. Think long term: Like all investing, fractional shares work best when you give them time. Don’t panic over short-term dips – stay focused on your goals.

Ready to get started?

1. Open your account easily with Crypto.com
2. Open your Crypto.Com Stocks account
3. Deposit into your Stocks account securely using your preferred method
4. Explore fractional shares with zero commission and no added spread
5. Start investing today in over 10,000 US stocks and ETFs

Foris Capital US LLC (FCUL or, at times herein “Crypto.com Stocks”) is a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a Member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). For further information about FCUL, please visit FINRA BrokerCheck.  

FCUL is a subsidiary of Crypto.com. FCUL is a separate entity from Crypto.com, Foris DAX, Inc. and other affiliated Foris companies. FCUL does not engage in the sale, transfer or custody of crypto currencies or digital assets. Crypto.com is a separate entity from FCUL and does not engage in the securities business. Customer balances and crypto holdings held and transacted at Crypto.com and other entities outside of FCUL are not covered by SIPC insurance and are separate from securities transactions and holdings at FCUL.

Fractional shares are not available for all equities.

All investments involve risk, and not all risks are suitable for every investor. The value of securities may fluctuate and as a result, clients may lose more than their original investment. The past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss in a down market. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing.

​​This is informational content sponsored by Crypto.com and should not be considered as investment advice.