UnThreaded | Threaded | Whole Thread (15) | Ignore Thread Prev | Next
Author: desertdaveataol Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8880  
Subject: Re: Need ideas: low-cost broker that DRIPs Date: 6/22/2004 10:20 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
Jody,
One of the main reasons for having a DRIP account is so you DON'T have to deal with a broker. Although Scottrade (@$7.99 a trade) is the DISCOUNT broker I'd go with if I wasn't already with Ameritrade (@$10.99 a trade). Those other brokers you mention are so called "full service" brokers which means they'll charge you a lot more per trade.

Brokers don't do DRIPs, companies do DRIPs. When you buy into a DRIP you are dealing either directly with the company as is the case with SO (Southern Company).

Or, when you DRIP companies like PNY or WTR (both of which give you a 5% discount on reinvested dividends by the way), you are dealing with the company through an intermediary such as Equiserve.

Of course there are costs involved in keeping track of all the money, stock certificates and people involved with DRIPs so, since there is no such thing as a free lunch, somebody has to pay those costs.

With a FEE FREE DRIP the company pays the intermediary. With fee DRIPs all or part of those fees are passed on to the customers. I've found that there are plenty of good companies out there offering FEE FREE DRIPs so don't think you have to pay a fee to DRIP.

Bottom line:
I've heard that there is a DRIP plan that allows IRAs but I can't recall it right now. So I'd keep the IRAs with Scottrade as their trading fees are some of the least expensive around right now.

I'd keep all my non-IRA accounts with Scottrade too and put new money into DRIPs as you feel the need.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (15) | Ignore Thread Prev | Next

Announcements

Motley Fool Income Investor
Are you a dividend-savvy investor? Check out our Income Investor newsletter.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Saul's Investing Discussions

Why Did I Buy a Bunch of PFIE Today?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement