Fractional shares: Investing in expensive NASDAQ stocks from India

Indian investors can now own pieces of a $722,000 Berkshire Hathaway share or build positions in $4.5 trillion NVIDIA for as little as $1. Fractional shares have removed the most significant barrier that historically excluded retail investors from premium stocks. With eight platforms serving Indian investors and favourable 12.5% LTCG tax rates, building a global portfolio has never been more accessible.

What are fractional shares, and how do they work

Fractional shares represent ownership of less than one full share of a stock. When you invest $100 in a stock trading at $1,000, you receive 0.1 shares. Brokers record this precisely in their systems, sometimes tracking ownership to six decimal places.

The mechanics involve dollar-based investing, in which brokers aggregate orders from multiple customers. They purchase whole shares and allocate proportional ownership through book-entry systems. Your ownership is recorded in the brokerage's internal ledger rather than directly with the stock's transfer agent. This creates a beneficial interest structure in which you hold equivalent economic rights without being the legal owner.

Custody arrangements typically use omnibus accounts. The broker holds whole shares at depositories like the Depository Trust Company while tracking each customer's fractional ownership internally. Under SEC Rule 15c3-3, brokers must segregate customer securities from firm assets. This provides crucial protection even for fractional positions.

Dividend treatment works proportionally. Own 0.5 shares paying $2 dividend per share, and you receive $1. However, voting rights vary significantly across platforms. Some brokers aggregate fractional votes and communicate them collectively, while others offer no voting rights until you hold full shares.

One critical limitation exists—fractional shares cannot be transferred between brokers. You must sell them when switching platforms, which may trigger tax implications. Plan your broker relationships for the long term.

Platforms offering fractional investing to Indian investors

INDmoney leads with a zero-fee structure

INDmoney has emerged as the cost leader. The platform offers access to 9,000+ US stocks with zero brokerage, zero withdrawal, or platform fees. The only cost is a 0.75% platform fee on deposits capped at ₹1,000. Operating through DriveWealth/Alpaca partnerships and GIFT City's IFSCA-regulated route, INDmoney provides dual access pathways with a $1 minimum investment.

Vested Finance offers the deepest functionality.

Vested Finance offers the most comprehensive feature set, covering 10,000+ securities. The platform supports weekly and monthly SIPs, extended-hours trading from 4:00 AM to 8:00 PM ET, and tax-loss harvesting tools. Their tiered pricing charges 0.25% brokerage on Basic plans and 0.15% on Premium plans, at ₹375 per month, capped at $35 per trade.

Interactive Brokers for serious investors

The professional-grade option offers 10,500+ fractional stocks across the US, Canadian, and European markets. IBKR Lite offers $0 commission on US stocks and ETFs, while Pro charges $0.005 per share. Superior forex rates around 0.002% spread suit active traders, though the interface complexity may overwhelm beginners.

Platform comparison at a glance

Groww has paused new US stock account openings as of early 2026.

For a detailed breakdown, read our guide on comparing US stock trading platforms available to Indian investors.

This limits options for those seeking integrated domestic and international platforms.

Benefits of fractional shares for expensive stocks

The true power of fractional investing emerges with prohibitively expensive stocks. Berkshire Hathaway Class A trades at approximately $722,500 to $754,800 per share in February 2026. This remains utterly inaccessible through traditional full-share purchases. With fractional shares, $100 buys you 0.000138 shares, giving proportional exposure to Warren Buffett's conglomerate.

Current prices of key NASDAQ and US stocks

The Magnificent Seven stocks dominate investor interest:

• NVIDIA trades between $178 and $188 witha market cap exceeding $4.5 trillion
• Apple ranges from $261 to $270 with a market cap of over $3 trillion
• Microsoft sits at around $480 with a market cap of above $3 trillion
• Alphabet trades between $344 and $346, approaching $4 trillion
• Amazon ranges from $242 to $243 with a $2.48 trillion market cap
• Meta prices between $688 and $706
• Tesla hovers around $420

Ultra-high-priced stocks benefit most from fractional access. NVR Inc. trades at $7,564, Booking Holdings at $5,308, AutoZone at $3,473, and MercadoLibre at $2,026. Without fractional shares, owning these companies would require massive capital outlay.

For an Indian investor with ₹10,000 (approximately $118), fractional shares allow ownership of all Magnificent Seven stocks simultaneously. This diversification remains impossible when a single Meta share costs $700.

Minimum investment amounts across platforms.

Most platforms serving Indian investors offer remarkably low entry points. INDmoney, Vested Finance, Interactive Brokers, and Winvesta all accept investments starting from just $1. This translates to roughly ₹85 at current exchange rates.

Fi Money requires a slightly higher $5 minimum, while HDFC Securities, through its Stockal partnership, accepts investments as low as $0.01 for fractional positions. The low minimums enable systematic investment plans where you invest fixed rupee amounts regularly, ly regardless of stock prices.

Currency conversion adds a layer of consideration. Converting small amounts frequently incurs proportionally higher costs. Batching investments into larger monthly transfers of ₹10,000 or more typically reduces the per-transaction forex impact.

Building a diversified portfolio with fractional shares

Sample portfolio for ₹10,000 investment

With approximately $118 available, you can build meaningful diversification:

ETFs versus individual stocks

For investors under ₹25,000, ETF-heavy portfolios often make more sense. VOO or QQQ provide instant diversification across hundreds of companies through a single fractional position. Individual stock picking becomes more viable above ₹50,000, where you can maintain meaningful positions across 8 to 12 holdings.

Learn more about building a balanced US-India stock portfolio to optimise your diversification strategy.

Dollar-cost averaging through fractional SIPs particularly shines. Platforms like Vested and INDmoney enable weekly or monthly automated investments of fixed rupee amounts. This smooths entry prices over time regardless of stock price levels.

Cost considerations for fractional investing from India

Direct costs breakdown

Currency conversion represents the highest hidden cost. Banks charge 1.5% to 3% markups on forex, while platforms like INDmoney offer approximately 0.75% spreads. Interactive Brokers provides best-in-class 0.002% rates. For ₹1,00,000 invested, this difference means ₹750 versus ₹20 in conversion costs.

Transaction flow for ₹1,00,000 investment:

Tax implications require careful planning.

Capital gains tax applies to gains realised after a 24-month holding period. Long-term capital gains exceeding 24 months attract a flat 12.5% rate after the Budget 2024 changes. Short-term gains under 24 months get added to income and taxed at slab rates ranging from 0% to 30%.

Dividend taxation involves both the US and Indian layers. The US withholds 25% at source, reduced to 30% under a DTAA, when you submit Form W-8BEN. India taxes dividends at your slab rate as income from other sources. Foreign Tax Credit remains available. If your Indian slab rate is 30% and the US withholding rate is 25%, you pay only the 5% difference.

Tax Collected at Source on foreign remittances applies at 0% up to ₹10 lakh annually. Above this threshold, 20% TCS gets collected but remains refundable against your tax liability when filing returns.

File Form 67 before your ITR to claim Foreign Tax Credit. Report all foreign holdings in Schedule FA. Failure attracts Black Money Act penalties.

Best stocks for fractional investing

Growth stocks with strong momentum

NVIDIA leads the AI infrastructure revolution, with data centre revenue growing by over 100% annually. Apple combines hardware ecosystem lock-in with growing services revenue. Microsoft dominates enterprise software and cloud computing through Azure.

Dividend stocks for income seekers

For fractional investors seeking income, several options stand out. Johnson & Johnson offers stability with consistent dividend growth. Procter & Gamble provides consumer staples exposure with reliable payouts. Coca-Cola delivers brand power with over 60 years of consecutive dividend increases.

ETFs for instant diversification

VOO tracks the S&P 500 with a 0.03% expense ratio,o offering exposure to 500 large-cap US companies. QQQ follows the NASDAQ-100 with a tech-heavy allocation. VTI provides total US stock market coverage across all market caps.

Is fractional investing safe for Indian investors

SIPC protection extends to fractional shareholders

The Securities Investor Protection Corporation explicitly covers fractional shares up to $500,000 per customer, including a $250,000 cash maximum. SIPC states there is no requirement that a customer reside in or be a citizen of the United States. Indian investors receive the same level of protection as American citizens.

Major brokers add excess SIPC insurance through Lloyd's of London. Interactive Brokers offers $30 million per customer. Charles Schwab provides $150 million combined coverage.

Key risks to understand

Transfer limitations create lock-in risk. Fractional shares cannot move via ACATS between brokers. You must sell and transfer cash, which may trigger capital gains. Plan broker relationships carefully.

Liquidity is not guaranteed during extreme market conditions. Most fractional orders are executed only during regular market hours, from 9:30 AM to 4:00 PM ET.

Execution happens as principal rather than through exchange routing. Brokers often fill fractional orders from their own inventory at the NBBO midpoint. This may affect price quality during periods of volatility.

Practical example with February 2026 numbers

Consider building a 5-stock portfolio with ₹10,000 monthly SIP over 12 months.

Month 1 allocation at ₹10,000 or $118:

• NVDA: $35.40 buys 0.188 shares
• AAPL: $23.60 buys 0.088 shares
• MSFT: $23.60 buys 0.049 shares
• GOOGL: $17.70 buys 0.051 shares
• AMZN: $17.70 buys 0.073 shares

After 12 months with ₹1,20,000 invested assuming stable prices:

• NVDA: 2.256 shares worth approximately $425
• AAPL: 1.056 shares worth approximately $276
• MSFT: 0.588 shares worth approximately $282
• GOOGL: 0.612 shares worth approximately $211
• AMZN: 0.876 shares worth approximately $212
• Total: approximately $1,406 plus or minus market movements

Dollar-cost averaging through fractional shares captures more shares during dips and fewer during peaks. This mechanical discipline removes emotional decision-making from the investment process.

Fractional shares have fundamentally transformed how Indian investors access global markets. The ability to own shares in a $722,000 Berkshire or to build diversified Magnificent Seven portfolios with ₹5,000 removes the primary barrier that has historically kept retail investors out of premium stocks. The combination of $1 minimums, proportional dividends, SIPC protection, and sophisticated SIP tools makes fractional investing the most accessible route to NASDAQ exposure. Hold positions for 24 months or longer to benefit from favourable 12.5% LTCG rates and stay under ₹10 lakh annual remittance to avoid TCS cash flow impact. The infrastructure exists, and the opportunity awaits disciplined execution.