So, can you buy fractional shares on TD Ameritrade? If you are a young investor, most probably, you may start wondering what fractional shares are and how they work. Fractional shares are portions of a share that enable investment in a company without having to raise enough money to purchase one full share. It makes investing available for people who do not have the money to buy a share.
TD Ameritrade is in the top league table of online brokerages, but can you buy fractional shares on TD Ameritrade? Yes, you can. We will explain how in this blog post.
A fractional share, or fractional stock, is simply a portion of a regular share. For example, if someone wanted to invest, they would have to buy a whole share in Amazon. With fractional shares, however, one would have the opportunity to invest in Amazon for as low as $1.
It means a share in the company without having to put too much money into it. Fractional shares will also come in handy for investors looking to diversify their portfolios but cannot afford to buy whole shares to do so.
Yes, TD Ameritrade does allow one to buy fractional shares. Actually, TD Ameritrade was among the very first online brokerages to sell fractional shares. They call this “partial shares,” meaning that you can invest as low as 0.0001 of a share, so everyone can participate.
How to Buy Fractional Shares on TD Ameritrade
It is easy to buy fractional shares on the TD Ameritrade platform. Follow these steps:
- Open a TD Ameritrade Account
First, you will need to open a TD Ameritrade account. You do this by navigating to their webpage and going through their new account opening process.
- Fund Your Account
Once you have opened an account, you will need to fund it. TD Ameritrade requires a minimum of $0 to open an account, but you will need to have enough in the account to purchase the fractional shares you want to buy.
- Search for the Stock You Want to Buy
Now, locate the stock you’d like to buy. You can do this by searching the company name or ticker symbol in the search bar on TD Ameritrade’s website.
- Place Your Order
Once you have identified the stock you would like to buy, place your order. You’ll need to specify how many shares you’d like to buy, but with fractional share buying, you’ll specify the decimal amount, such as 0.5 shares.
- Review and Confirm Your Order
Before you finalize your order, you will be asked to double-check the details and confirm them, including the number of shares you are buying and the price per share.
- Wait for Your Order to Be Filled
Once you have placed the order, you will subsequently need to wait for this order to fill, which may take a few minutes or longer depending upon market conditions.
Here are some of the benefits associated with buying fractional shares through TD Ameritrade:
Lower Minimum Investments
Fractional shares let investors invest in companies with lower minimums to set up a diversified portfolio.
Accessibility
Fractional shares are available to investors who do not have money to buy a whole share.
Diversification
It allows the diversification of the portfolio without putting big investments into it.
No Commissions
Fractional-share trading comes commission-free at TD Ameritrade, so the cost to invest is very low.
Fractional shares are an excellent means of starting an investment…
