Investor Jargon: Fractional Shares
A lot of investing-related language can be straight-up confusing. This can make investing seem scary and much more complex than it actually is. We’d rather investing be approachable, so we’re breaking down some of the common investing terms you might see or hear.
Say you love Totally Made Up Company and you want to own a piece of it. The problem? Shares are $1000 and you only have $5 to invest right now. One of the biggest reasons some people don’t start investing is because they don’t have enough money to buy a full share of stock. That’s where fractional shares come in.
What are fractional shares?
A fractional share of stock is literally just a fraction of a full share of stock. They can help lower that cost barrier. Using our example above, instead of having to pay the full $1000 for one share of Totally Made Up Company stock, you could pay $5 to start with and you’d still own a piece of it—a smaller piece, sure, but still: ownership. That smaller piece can also increase in value at the same rate as a full share. While not every Broker-Dealer offers to buy, hold, or sell fractional shares, Bumped charges no fees to do so. See our Fee Schedule for full details. (Spoiler: There aren’t any).
Other things to know about fractional shares:
- Fractional shares typically aren’t transferable. If you want to close or transfer your Bumped account, you may have to sell your fractional shares first. We don’t currently charge anything to sell or ACH the proceeds to your linked bank account.
- Fractional shares can’t be put into certificate form or physically mailed.
- Fractional shares don't have voting rights.
We love fractional shares because you can start owning what you love with less.