As a young person starting out on your investing journey, choosing the right brokerage firm can make a big difference in the success of your investments. With so many options available, it can be overwhelming to decide which brokerage firm is best suited for you. Fractional shares are an excellent way to break into the investing world and begin to build wealth, so we have focused on that aspect.
In this article, we'll review eight brokerage firms that allow buying fractional shares, with a focus on their ease of account opening, trading fees, account minimums, customer service, and other important factors.
Fidelity Investments is a popular brokerage firm that offers the option to buy fractional shares through its Fidelity Fractional Shares program. The firm has an account minimum of $0 and charges no commissions for US stock, ETF, or options trades. However, Fidelity does charge a $4.95 commission for mutual fund trades. Opening an account with Fidelity can be a bit challenging for teenagers as it requires a paper application and proof of identity.
Charles Schwab is another brokerage firm that allows buying fractional shares through its Schwab Stock Slices program. The firm has an account minimum of $0 and doesn’t charge commissions for US securities trading. Schwab makes it very easy for teenagers to open an account - simply download the app and go. The firm's customer service is also highly regarded.
Robinhood is a popular commission-free trading app that allows users to buy and sell fractional shares. The app has no account minimum and no commissions for US stock, ETF, or options trades. Robinhood's user-friendly app design and gamified experience have made it a popular choice among younger investors. However, its customer service can be spotty.
ETRADE offers fractional share investing through its "FlexShares" program. The firm has no account minimum restrictions and charges no commissions for all kinds of trades. ETRADE's website and mobile app are user-friendly, and the firm offers a variety of investment tools and research resources.
5. M1 Finance
M1 Finance is a brokerage firm that allows users to buy fractional shares and create custom portfolios. The firm has an account minimum of $100 but is commissions-free for US stock, ETF, or options trades. M1 Finance offers a unique "pie" investing tool that allows investors to build a customized portfolio of stocks and ETFs. Its customer service is reputed to be middle-of-the-road.
Webull is another commission-free trading app that allows users to buy and sell fractional shares. The app has no account minimum and no commissions for trades of securities. Webull offers a variety of investment tools and research resources, including real-time market data and a customizable stock screener. However, Webull's customer service can be slower than other brokerages.
TD Ameritrade offers fractional share investing through its "Stocks by the Slice" program. The firm doesn’t require customers to maintain a minimum account balance and does not charge commissions for trades. TD Ameritrade's website and mobile app are user-friendly, and the firm offers a wide range of educational resources for new investors. It offers solid customer service.
8. SoFi Invest
SoFi Invest is a brokerage firm that allows users to buy fractional shares and offers automated investing through its "SoFi Automated Investing" program. The firm has an account minimum of $1 and charges no commissions. Setting up an account is straightforward for young investors.
Brokerages have various benefits and drawbacks, so finding the right one takes a bit of research. The firms listed above offer fractional shares so you can begin to build a portfolio of the specific stocks and ETFs you want. Look for reliable customer service, seamless trading, low commissions, and ease of setup as you begin your search.
High school freshman Finley Lewis is a self-taught day trader, and the author of 9 Rules to Dominate Your Money and Learn What 67% Of Adults Don’t Know.
He writes about financial literacy for teens, aiming to fill the gap the education system leaves in preparing young people for success in later life.
Finley has been an investor for three years, beginning his journey at the start of the Covid-19 pandemic. He has always been passionate about money and had the importance of managing and spending it wisely instilled in him at a young age. The more he learned, the more he noticed the shocking absence of financial literacy teaching in school, and he became determined to share his knowledge to help other teenagers.
Wise beyond his years, Finley recognizes that the key to building wealth is time, and he’s dedicated to making sure young people have the knowledge they need early enough to get a head start.
Finley is a straight-A student and spends half an hour a day watching Spanish TV in order to learn the language. He volunteers in the community and loves baking (just ask his friends about his chocolate chip cookies!).