Online Dividend Reinvestment Plan Investing?

Here’s an idea:  Sharebuilder.com + Dividend Reinvestment Plans (DRPs)

There are some online accounts for DRPs, but what I’ve seen so far are clunky.  It seems like there’s potential to retail the idea.

If anyone knows of anything that I’m missing, please let me know.

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4 thoughts on “Online Dividend Reinvestment Plan Investing?

  1. Dividend reinvestment plans are great and I have written several posts about them.

    Not sure what you mean by “if anyone knows anything that I’m missing, please let me know”.

    What do you know? What do you think you are missing?

    • Thanks for the comment.

      I mean, do you know if there’s already a Sharebuilder.com-like online service where you can invest in any DRP?

      For me, the drawback to DRP investing is having to buy a share, get it transferred and maintain a separate account for each investment. It looks like you can get an account at Wells Fargo that lets you invest in any of the DRPs that Wells Fargo manages, but those investment choices are fairly limited and the interface looks clunky.

      When I started investing, I used DRPs but eventually moved to a brokerage account because of the hassles mentioned above. That was years ago. Now my kid is getting interested in investing and thought DRPs would be a good place to start.

      I figured by now somebody would have solved the problems that moved me away from DRP investing by making a simple, online account where you could buy the initial share or just piggybank on the firm’s DRP plan (kind of like holding the stock in street name), with an easy to use, brokerage-account-like interface and the benefits of dividend reinvestment. If there was such a thing, I might be inclined to use it.

      • Ya, they are clunky to use and not many people know that companies even offer DRIP plans. I still think it would be a great way to teach a kid about investing. The physical act of sending in checks and getting paper statements in the mail might not be a bad thing in this day when money just seems to me figures on a computer screen.

        I know here in Canada, many online brokers say they offer DRIP plans like you suggest, but you have to be careful. They say they will gladly reinvest your dividends through your online account with out the hassle of a traditional DRIP plan.

        Problem is they will only invest in whole shares, and won’t buy the shares at a discount which is something a lot of DRIP plans offer.

        My plan is to invest using DRIP plans for a while, then move all the money into a broker account once the amount gets high enough that the broker fee is a small % of my transaction. Then instead of automatically re-investing my dividends, I will decide which stock seems undervalued that month and use all my dividends to pick up more shares of that one company.

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