How to Invest in DRIPs
Investing in a Dividend Reinvestment Plan (DRIP) is a great way to make a small amount of money grow over time. Many companies offer direct opportunities for current and new investors to join these programs with a small or even no initial investment at all. This is also a way to invest without paying brokerage fees for each transaction you make. Read on to learn how to invest in DRIPs.
Other People Are Reading
Instructions
-
-
1
Find a list of DRIPs. There are a number of websites that list the companies who offer DRIP programs.
-
2
Research the companies that interest you. It's always a good idea to learn about the business of the company including its stock's past performance and future forecast. Order a prospectus from each company to find this information.
-
-
3
Find out what the minimum investment requirements are. Some DRIPs will require you to own at least one share of their stock to enroll in their program. You may have to make a larger initial investment, some as low as $250, to enroll and then a minimum monthly deposit ranging from $10 to $100. There are also maximum amounts you can invest in a DRIP each year.
-
4
Learn what fees are charged with any investing you do. Some DRIPs charge a number of small fees for every transaction like setting up your account, all monthly investments, all reinvestments of dividends and the selling of your shares. These are usually not very expensive but can add up over time.
-
5
Make your initial investment. This can be done directly through some companies but for others you'll have to go through a third party. A company's website should provide you with the information needed to invest. Once you've done this you can determine how you'll contribute to your DRIP in the future.
-
1
