Introduction
Investing in the stock market has become easier and more accessible than ever before. With the rise of online brokers like TD Ameritrade, anyone can buy and sell stocks from the comfort of their own home. But what about buying fractional shares? Is it possible to invest in a portion of a stock on TD Ameritrade? In this article, we’ll explore the answer to that question and more.
What are Fractional Shares?
Fractional shares are portions of a stock that are less than one full share. For example, if a company’s stock is worth $100 per share, a fractional share could be 0.5 shares, or $50 worth of the stock. Fractional shares make it easier for investors to diversify their portfolios and invest in expensive stocks without having to buy a full share.
Can You Buy Fractional Shares on TD Ameritrade?
Yes, you can buy fractional shares on TD Ameritrade. In fact, TD Ameritrade was one of the first online brokers to offer fractional share trading. This feature is available on their mobile app and website, and allows investors to buy and sell fractional shares of over 7,000 stocks and ETFs.
How to Buy Fractional Shares on TD Ameritrade
To buy fractional shares on TD Ameritrade, you’ll need to follow these steps:
Step 1: Open an Account
If you don’t already have an account with TD Ameritrade, you’ll need to open one. This can be done online or through their mobile app. You’ll need to provide some basic personal information and financial details.
Step 2: Fund Your Account
Once you have an account, you’ll need to fund it. You can do this by transferring money from your bank account or by depositing a check. TD Ameritrade offers a variety of funding options to make it easy for you to get started.
Step 3: Search for the Stock
Once your account is funded, you can search for the stock you want to buy. TD Ameritrade’s website and mobile app have a search function that allows you to find stocks by name, symbol, or industry.
Step 4: Buy the Fractional Shares
When you’ve found the stock you want to buy, you’ll need to enter the amount you want to invest. TD Ameritrade will automatically calculate how many fractional shares you can buy with that amount. You can then review your order and confirm the purchase.
Benefits of Buying Fractional Shares on TD Ameritrade
There are several benefits to buying fractional shares on TD Ameritrade:
Diversification
Fractional shares make it easy for investors to diversify their portfolios. Instead of having to invest in whole shares of expensive stocks, investors can buy a portion of the stock and spread their investments across multiple companies.
Cost Savings
Buying fractional shares can also be cost-effective. Instead of having to buy a full share of an expensive stock, investors can buy a portion of the stock at a lower cost. This can make it easier for investors to get started with investing.
Flexibility
Fractional shares also offer investors more flexibility. Investors can buy as much or as little of a stock as they want, which allows them to tailor their investments to their specific goals and risk tolerance.
Conclusion
In conclusion, TD Ameritrade does offer the ability to buy fractional shares. This feature makes it easier for investors to get started with investing and can offer several benefits, including diversification, cost savings, and flexibility. If you’re interested in buying fractional shares, TD Ameritrade is a great option to consider.
