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.
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 $10 to start with and you’d still own a piece of it—1% is 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. Bumped charges a fee to transfer shares to other broker dealers. See our Fee Schedule for full details.
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. You may encounter a transfer fee, as noted in our fee schedule.
- Fractional shares can’t be put into certificate form or physically mailed.
- Fractional shares do not have voting rights.
These fractional shares are at the core of what Bumped does. Being able to give customers a portion of a high-priced share means you can start owning what you love with less.