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DSPP Direct Stock Purchasing Plan
Old 07-18-2012, 11:48 AM   #1
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DSPP Direct Stock Purchasing Plan

I'm considering buying some Verizon and Coca Cola stock through Computershare, do these fees seem low, high or reasonable? My plan is to buy the stocks, hold them and receive dividends as income.

Verizon

Initial Setup Fee $0.00
Cash Purchase Fee $0.00
Ongoing Automatic Investment Fee $0.00
Purchase Processing Fee (per share) $0.03
Dividend Reinvestment Fee 5% of amount reinvested ($1.00 min/$3.00 max)
Batch Sale Fee $15.00
Batch Sale Processing Fee (per share) $0.12
Batch Maximum Sales Fee N/A
Market Order Sale Fee $25.00
Market Order Processing Fee (per share) $0.12
Market Order Maximum Sales Fee N/A

Coca Cola

Initial Setup Fee $10.00
Cash Purchase Fee $3.00
Ongoing Automatic Investment Fee $2.00
Purchase Processing Fee (per share) $0.03
Dividend Reinvestment Fee 5% of amount reinvested up to a maximum of $2.00
Batch Sale Fee $15.00
Batch Sale Processing Fee (per share) $0.12
Batch Maximum Sales Fee N/A
Market Order Sale Fee $25.00
Market Order Processing Fee (per share) $0.12
Market Order Maximum Sales Fee N/A
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Old 07-18-2012, 04:40 PM   #2
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Coca Cola (KO) DRIP - Dividend Reinvestment Plan Advice

The fees are the same at dripadvice, which I use. Note the cons for KO, however. The fees are compared to other DRIPs.

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Cons:
Dividend Reinvestment fees
Account setup fee
Stock sale fee above average
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Old 07-18-2012, 09:05 PM   #3
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Wouldn't it be cheaper just to get an etrade account or something like that?
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Old 07-18-2012, 10:41 PM   #4
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5% reinvestment seems really steep in general. Like a 5% front-end load mutual fund. And of course just about zero diversification. Not something I would do.
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Old 09-01-2012, 05:24 PM   #5
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If the company of the stock you want to buy has a dividend reinvestment plan, most brokers who hold the stock for you will allow you to reinvest dividends free of charge. If the company has fees in its plan, it would be probably less expensive to open a discount brokerage account and let them reinvest the dividends for you.
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Old 09-01-2012, 06:59 PM   #6
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DSPPs are obsolete and anachronisms.

They were great when commissions to buy stocks were $300 a pop and when mutual funds and ETFs did not exist. They are unwise when commissions to buy stocks, ETFs, and mutual funds are now zero.

Just about every broker has some deal with free commissions and free dividend reinvesting. So if you are paying anything for this kind of stuff, you are paying too much.

Also note that you will need to keep good records of all these transactions for your future tax returns. We see over and over on this forum questions from folks who cannot figure out their cost basis from old DRIPs.

Bottom line: Just say no.
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Old 09-01-2012, 08:36 PM   #7
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IMO a brokerage account makes more sense. DW and I used DRIP's years ago but low-cost brokerage accounts did not exist at the time.

There is still one reason I might consider a DRIP - some allow you to purchase the stock at a discount.
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Old 11-13-2012, 09:55 AM   #8
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Well we own "XOM" and "NJR" in DRIPS and pay no fees whatsoever, I'm not sure any brokerage can beat that for dollar cost averaging.

No cost DRIPS are great for the small investor
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