Friday, February 20, 2015

Buy Company Direct Stock

Buy company stock directly and save money.


The usual method for buying stock is to open an account with a brokerage firm and pay a broker to handle investing and trading transactions for you. However, you will have to pay account maintenance and brokerage fees in addition to broker commissions. The best way to bypass all of these fees is to purchase stock directly from the company offering it. The stock is sold through a direct stock plan (DSP). Any dividends you receive can also be automatically reinvested through a dividend reinvestment plan (DRIP).


Instructions


1. Determine if the company you are interested in purchasing stock from offers a DSP. There are many companies that offer direct stock plans. Therefore there is a good chance that the company you are interested in offers it. Contact the company's investment relations department and ask if they offer a DSP.


2. Request a DSP investment packet by contacting the company's DSP service department. It will contain all of the forms and information needed to start investing. They will mail a packet to you as soon as possible.


3. Review the plan's structure to determine if it fits your investment goals. There is no standard uniform structure that all companies must follow to run a DSP. Therefore, different companies offer their plans according to what is best for their shareholders and themselves. For example, some companies require that a minimum amount of capital is maintained in your account for it to remain active, while other companies may allow you to invest a dollar amount as opposed to purchasing an entire share. Choose the DSP that you are most financially comfortable with.


4. Submit the DSP paperwork to the company. Fill out the necessary paperwork. Some examples of information required are: your name, address, social security number, employment and banking information. An initial check or electronic funds transfer will also be required to open the account. Mail or drop off the paperwork to the company.


5. Purchase more stock from the company directly. Once your application has been approved and the process is complete you will be allowed to purchase stock yourself. Most companies allow you to either send them a check or transfer funds electronically to buy more shares.