Schwab Stock Slices™

You have questions. We have answers.

What is Schwab Stock Slices?

Schwab Stock Slices is an easy way to buy fractional shares (or whole shares) for a set dollar amount. You have the option to buy slices of stock in up to 30 top U.S. companies in a single transaction. The shares you purchase through Schwab Stock Slices can be held and sold independently.

What's a fractional share?

A fractional share (stock slice) is when you own less than one whole share of a company. Fractional shares allow you to invest in stocks based on a dollar amount, so you may end up with a fraction of a share, a whole share, or more than one share.

Do fractional shares pay dividends?

Yes, proportionate to the percentage of the share you own.

What rights are different when you own less than one whole share of stock?

Voting: If you own less than one whole share of stock, you will generally be able to participate in mandatory corporate actions such as stock splits, mergers, or spin-offs, but you will not be able to participate in any shareholder vote or voluntary corporate actions like tender offers and certain rights offerings.

 

Transferability: If you want to transfer your account or specific share positions to another broker, only whole shares can be transferred.  Your fractional shares that cannot be transferred or reorganized will be liquidated at prevailing market prices, and the proceeds will be credited to your account. Since your fractional shares cannot be transferred, your overall SIPC coverage may be affected.

 

Corporate Action: If you receive fractional shares as the result of a stock split or other corporate action, we may either sell the shares on the open market or to the issuer or transfer agent, and you are entitled to receive your pro rata portion of the proceeds of such sale. If sold on the open market, the sale price may differ from that offered to certain registered owners by the issuer or transfer agent.

 

Which stocks are available for purchase through Schwab Stock Slices?

The shares available for purchase through Schwab Stock Slices are those in the S&P 500 Index (S&P 500), which includes the 500 leading large-cap U.S. publicly traded companies. The S&P 500 is often used as a benchmark or indicator of how large-cap U.S. equities are performing. See a list of companies in the S&P 500 Index.

Is there a minimum or limit on how much I can invest through Schwab Stock Slices?

Yes, the minimum for a single transaction is $5, and the maximum is $50,000 per transaction.

Is there a limit on the number of fractional shares I can buy through Schwab Stock Slices?

No. You can use Schwab Stock Slices to invest as often as you want.

What happens after I make a purchase through Schwab Stock Slices?

The individual share(s) will be in your brokerage account.

Do I need a Schwab account?

Yes, to place a Schwab Stock Slices order, you will need to have an eligible Schwab brokerage account (e.g., custodial, individual, joint account, etc.).

Are there any fees?

There are no commissions when you place a trade online through Schwab Stock Slices.

What happens to my fractional shares if there is a stock split?

Multiply your current fractions by the whole number shares of the stock split to see what your future whole or fractional share holdings will be, upon completion of the stock split. For example, if you owned .15 of a share and the company announced a split of three additional shares, you could anticipate holding .45 (0.15 x 3) of a share when the stock split is complete. If you held .43 shares of the same company, at the completion of the stock split you'd have 1.72 shares. This equates to a whole share and a fractional share because the split would award you an additional 1.29 shares (.43 x 3) shares.