How to Buy Discounted Stocks Direct
Some companies have investment services that allow you to buy their stock directly. This type of plan is called a direct stock purchase plan, or DSPP, and enables consumers to bypass paying a broker commission. The plan also enables you to take advantage of possible discounts on the current stock price as well as dividend reinvestments.
Other People Are Reading
Instructions
-
-
1
Go to websites of transfer agents that administer DSPPs. The three largest are Bank of New York Mellon (BNY Mellon), American Stock Transfer & Trust (AST) and Computershare. On the websites, you can find lists of all the stocks for which the agents administer plans.
-
2
Create a short list of companies you want to invest in. For each stock on the list, review the plan summary. Make a note of plan set-up fees (if any), minimum investments and discounts.
-
-
3
Determine the amount of the initial investments. The plans that offer discounts will have purchase or dividend reinvestment discounts of 1 percent to 5 percent. The minimum requirement to open a new account is set by the company and may range from $100 to $5,000.
-
4
Enroll and set up the direct bank deposit information.
-
1
Tips & Warnings
Dividend reinvestment plans require a minimum of one share of stock. Direct purchase plans also include dividend reinvestments, but do not require share ownership to enroll. Dividend reinvesting can be a powerful wealth building tool over time. As an alternative to online enrollment, you can print out plan materials and mail them in to the transfer agent with a check for your initial deposit.
