How to Buy Fractional Shares on Robinhood

Yes, Robinhood lets you buy fractional shares starting at $1

Robinhood's fractional share feature lets you purchase a piece of a stock rather than a whole share. You can start with as little as $1, which means you can own a fraction of expensive stocks like Amazon or Berkshire Hathaway without needing thousands of dollars upfront. This feature is available on most stocks and exchange-traded funds (ETFs) through the Robinhood app.

Fractional shares work the same way as whole shares in terms of ownership — if you own 0.5 shares of a company, you own half the voting rights and half the dividend payments that a full share would give you. The main difference is the size of your position and the amount of capital you need to start.

Key Takeaways

• Robinhood allows fractional share purchases starting at $1 for most stocks and ETFs without a minimum account balance.
• You can set up automatic fractional share investments through Robinhood's recurring investment feature, which buys shares on a schedule you choose.
• Fractional shares on Robinhood carry the same tax implications as whole shares — you owe capital gains tax when you sell at a profit.
• Not all securities support fractional shares; penny stocks, some OTC stocks, and certain ETFs may not be available for fractional purchase.
• Robinhood does not charge commission on fractional share trades, though the bid-ask spread (the difference between buy and sell prices) still applies.

How to place a fractional share order on Robinhood

Open the Robinhood app and search for the stock or ETF you want to buy. Tap the stock name to open its detail page. At the bottom of the screen, you will see a "Buy" button — tap it to open the order screen.

On the order screen, you have two options: enter a dollar amount (for example, $50) or enter a number of shares (for example, 0.5). If you enter a dollar amount, Robinhood calculates how many fractional shares that buys at the current price. If you enter a share count, you can type a decimal — for instance, 2.25 shares. Tap "Review Order" to see the price and confirm, then tap "Submit Order" to complete the purchase.

The order executes during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays). If you place an order after market close or on a weekend, it queues for the next market open. Robinhood does not charge a commission on fractional share trades, though the bid-ask spread still affects your entry price.

Setting up automatic fractional share investments

Robinhood's recurring investment feature lets you buy fractional shares on a schedule without placing an order each time. To set this up, open a stock or ETF detail page, tap the three-dot menu, and select "Recurring Investment." Choose a dollar amount (the minimum is typically $1), select how often you want to invest (daily, weekly, or monthly), and pick the start date.

Once active, Robinhood automatically deducts that amount from your cash balance and buys fractional shares at market open on your chosen schedule. You can pause, resume, or cancel a recurring investment at any time from the same menu. This approach works well for dollar-cost averaging — buying the same dollar amount on a regular schedule regardless of price — because you buy more shares when the price is low and fewer when it is high.

Which stocks and ETFs support fractional shares

Most stocks and ETFs on Robinhood support fractional purchases, but not all. Stocks priced above $1 and included in major indexes are almost always available for fractional purchase. Penny stocks (stocks trading below $5), over-the-counter (OTC) stocks, and some specialized ETFs do not support fractional shares.

When you search for a stock on Robinhood, the app shows whether fractional shares are available. If the "Buy" button appears and lets you enter a dollar amount, fractional shares are supported. If you can only enter a whole number of shares, that security does not support fractional purchases on Robinhood.

Tax treatment of fractional shares

The IRS treats fractional shares the same as whole shares for tax purposes. When you sell a fractional share at a profit, you owe capital gains tax on the difference between your purchase price and your sale price. If you hold the fractional share for more than one year before selling, you may have access to for long-term capital gains rates, which are typically lower than short-term rates.

Robinhood sends you a Form 1099-B at tax time that reports all your sales, including fractional share sales. If a fractional share pays a dividend, Robinhood reports that dividend income on your tax documents as well. Keep records of your purchase dates and prices so you can calculate your gains accurately when tax season arrives.

Fractional shares and account transfers

If you transfer your Robinhood account to another brokerage, fractional shares may be handled differently depending on the receiving firm. Some brokers accept fractional share transfers as-is, while others round fractional positions up or down to whole shares. Before transferring, contact the receiving brokerage to ask how they handle fractional shares.

If the receiving brokerage does not accept fractional shares, you may need to sell your fractional positions before the transfer or accept that they will be rounded. Robinhood itself does not prevent you from transferring fractional shares out — the receiving firm's policies determine what happens to them.

Frequently Asked Questions

Can I sell a fractional share on Robinhood?

Yes. Open the stock detail page, tap "Sell," and enter either a dollar amount or a fractional share count. Robinhood executes the sale at the next market open if you place the order during market hours, or at the following market open if you place it after hours or on a weekend.

What happens to fractional shares if Robinhood goes out of business?

Robinhood is a member of the Securities Investor Protection Corporation (SIPC), which protects customer securities up to $500,000 per account in the event of a brokerage failure. Your fractional shares are held in your name and are protected under this coverage, the same as whole shares would be.

Do fractional shares pay dividends?

Yes. If you own 0.5 shares of a stock that pays a $2 dividend per share, you receive $1 in dividend income. Robinhood deposits dividends into your cash balance, and you can use that cash to buy more fractional shares or withdraw it.

Is there a minimum dollar amount to buy fractional shares?

Robinhood's minimum fractional share purchase is $1, though some recurring investments may have different minimums depending on your account type. Check the recurring investment screen for your specific account to confirm the minimum.

Can I use margin to buy fractional shares?

Yes, if you have a Robinhood Gold account with margin enabled, you can use borrowed money to buy fractional shares. Keep in mind that margin comes with interest charges and the risk of a margin call if your account value drops below the required minimum.