Last verified April 2026
ETF vs Mutual Fund Minimums and Fractional Shares in 2026
In 2018, "mutual funds require $3,000 minimum, ETFs require one share" was largely true. In 2026, it's obsolete. Fractional ETF shares at Fidelity ($1 minimum), Schwab ($5), Robinhood ($1), and M1 Finance ($1) mean the minimum to invest in VTI or VOO is effectively $1. Mutual fund minimums have also come down (or disappeared) at Fidelity and Schwab. Here's the real state of minimums.
ETF Minimums by Broker (April 2026)
| Broker | ETF minimum | Fractional ETF | Recurring buy | Auto DRIP |
|---|---|---|---|---|
| Fidelity | $1 (Stocks by the Slice) | Yes - most ETFs | Yes | Yes |
| Schwab | $5 (Schwab Stock Slices) | Yes - limited universe | Yes | Yes |
| Vanguard | 1 share or fractional Vanguard ETFs | Yes for Vanguard ETFs | Yes (since 2023) | Yes |
| Robinhood | $1 | Yes - most ETFs | Yes | Yes |
| M1 Finance | $1 | Yes - most ETFs | Yes (pie-based) | Yes (pie allocation) |
| Public | $1 | Yes | Yes | Yes |
| Interactive Brokers (IBKR) | 1 share or fractional (IBKR Lite/Pro) | Yes | Yes | Yes |
| Merrill Edge | 1 share (whole shares) | Limited | Limited | Yes |
| E*TRADE | 1 share (whole shares) | Some ETFs | Some ETFs | Yes |
Index Mutual Fund Minimums by Fund Family
| Fund family | Minimum (index funds) | Key funds | Notes |
|---|---|---|---|
| Fidelity | $0 | FXAIX, FSKAX, FTIHX, FXNAX, FZROX, FNILX | No minimum. ZERO funds available. |
| Schwab | $0 | SWPPX, SWTSX, SCHF, SCHZ | No minimum since 2018 |
| Vanguard (Admiral) | $3,000 | VTSAX, VFIAX, VTIAX, VBTLX | Reduced from $10k+ to $3k in 2018 |
| T. Rowe Price | $2,500 | PREIX, TRBCX | Some funds higher |
| American Funds | $250-$1,000 (R6 share class) | AGTHX, AIVSX | Primarily advisor-channel |
If You Have $50 to Invest
At Fidelity
Open a brokerage or Roth IRA. Buy $50 of VTI (fractional, $1 minimum via Stocks by the Slice) or $50 of FXAIX (no minimum, mutual fund). Both work. Either is an excellent starting point.
At Schwab
Buy $50 of SCHB (ETF fractional via Stock Slices, $5 minimum) or $50 of SWTSX (mutual fund, $0 minimum). Either works.
At Robinhood
Buy $50 of VOO or VTI fractional (minimum $1). Simple and effective.
At Vanguard
Buy $50 of VTI fractional (Vanguard ETF, fractional supported since 2023). VTSAX requires $3,000 minimum.
If You Have $5,000 to Invest
All options are open. Lean ETF for portability (VTI, VOO, SCHB are available at any brokerage, transfer cleanly via ACATS) or lean mutual fund for simplicity at fund-family direct accounts (VTSAX at Vanguard with $3k already met, FXAIX at Fidelity, SWTSX at Schwab). If you have a taxable account and are not at Vanguard, ETF (VTI, VOO, SCHB) edges out mutual funds on tax structure. Inside an IRA, pick whatever is cheapest and most convenient at your broker.
Fractional Share Caveats
- ! Fractional shares may not transfer cleanly between brokers. Some brokers sell fractional lots on ACATS transfer (generating a taxable event in a taxable account). If portability matters, accumulate whole shares when possible.
- ! Fractional holdings cannot always be transferred via ACATS. Some brokers require you to round up to whole shares before initiating a transfer.
- ! Not every ETF is eligible for fractional shares at every broker. Schwab's Stock Slices programme covers a limited universe. Verify your specific ETF's eligibility before relying on fractional.
- + For mutual funds, fractional is always available - you've always been able to invest any dollar amount and receive fractional mutual fund shares. This is a structural advantage that ETFs have now mostly replicated at major brokers.
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