Q: Hi Alex. So what do “fractional shares” mean?
Q: So what do “fractional shares” mean? I’m so leary about investing. This way sounds more trustworthy, but I’d like to understand better. –Julie
A: Thanks for asking, Julie! We understand how intimidating or overwhelming entering the stock market can feel, especially when one share of a company’s stock can cost hundreds– if not thousands– of dollars. Buying fractional shares, rather than full shares of stock, can make stock market investing a lot more accessible and affordable.
A fractional share of stock is literally just a fraction of a full share of stock. Instead of having to pay the full $1000 for one share of XYZ stock, you could pay $5 to start with and you’d still own a piece of it—a smaller piece, but still stock ownership. That smaller piece of stock can also increase in value at the same rate as a full share.
You can read more about what fractional shares are on our blog, but in summary, they essentially allow you to own what you love for less.
While not every Broker-Dealer offers to buy, hold, or sell fractional shares, Bumped charges no fees to do so, and automatically rewards you in fractional shares of stock of your choice for your everyday spending.
Plus with Bumped, you can earn them by fulfilling your regular shopping needs. For example, if you were to buy your groceries through the Bumped app or shop at any of your selected Bumped “Loyalty” brands, a percentage of the purchases you made would be given back to you in the form of fractional shares of stock.
The amount of fractional shares rewarded to you from Bumped depends on the percentage of stock rewards a merchant is offering, the amount of eligible purchases you make with them, and the current market value of the stock. Don’t worry– we figure all that out for you, so you’ll see your rewards automatically added to your account without another thought.
You can choose and personalize the types of stock you’d like to be rewarded with by heading to “My Stock Picks” in your Bumped account on mobile or web. Your “Loyalty” brands can offer a more streamlined experience: Shop with ABC brand, get ABC’s company stock.
It’s all our way of helping to make investing more simple, approachable, and dare we say– enjoyable. Hope this helps!