Buying stocks directly from companies

You may be the sort of person who likes to cut out the middleman in any transaction and so you're asking if you can get stock in a company without going through a broker. Many publicly traded companies offer direct stock purchase plans. A DSPP is an investment account you use to buy stock directly from the company. DSPPs have some real advantages for small investors. They have some disadvantages as well, so you need to think things through before jumping into this form of investing. Basically, a DSPP is an investment account dedicated to the stock of a single corporation.

Direct Stock Purchase Plans – Pros & Cons of Buying Stock Directly from the Company

You may be the sort of person who likes to cut out the middleman in any transaction and so you're asking if you can get stock in a company without going through a broker. Many publicly traded companies offer direct stock purchase plans.

A DSPP is an investment account you use to buy stock directly from the company. DSPPs have some real advantages for small investors. They have some disadvantages as well, so you need to think things through before jumping into this form of investing. Basically, a DSPP is an investment account dedicated to the stock of a single corporation. When you buy stock from a broker, shares are typically registered to the brokerage firm and credited to your account.

According to Bankrate. When you consider opening a DSPP with a company, read the plan brochure or prospectus carefully. There is sometimes a one-time set-up fee and the charges for selling shares are usually higher. If this describes you, DSPPs just might be your cup of tea. This not only makes investing with a DSPP affordable, it is a great way to save money on a regular basis.

The downside of direct stock purchase plans boils down to lack of flexibility. If you want to use DSPPs to buy shares in more than one company, you have to open a separate account for each one. Another problem is that all of your investment eggs are in one basket if you have just the one DSPP because there is no way to diversify your investments. To get the risk-reducing benefits of a diversified investment portfolio, you need a brokerage account that allows you to invest in a variety of securities if you want to avoid opening up a baker's dozen or more DSPP accounts.

He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in Lack of Flexibility The downside of direct stock purchase plans boils down to lack of flexibility. Video of the Day. Brought to you by Sapling. References Bankrate. How to Buy Individual Stocks.

Good Ways to Invest Your Money. Drip Stock Investment Programs. More Articles You'll Love. How do I Buy Stocks Direct?

To buy a stock, you'll want to evaluate the company as an investment, decide how You can buy stocks online, through a stockbroker or directly from certain. Several well-known companies will sell stock directly to individual investors. dividends go directly toward buying more stock in the company.

Achieving this is not easy, but you have to start somewhere. Investing in shares online is one of the best ways to reach this goal. And the good news is you that can do all of this completely online, from the comfort of your own home.

There are a few circumstances in which a person can buy stock directly from a company.

While many investors choose to buy and sell investments through a brokerage account , some investors may wonder how they can buy stocks without a broker. Direct investment plans offer the brokerage alternative that those investors are seeking. If your primary investing goal is to acquire a single company's stock as directly as possible, one of these plans can help you achieve that goal, but be aware of the drawbacks that come with avoiding brokerage services before you abandon them completely.

How to buy shares online

Investing wth DSPPs is a low-cost way to invest directly with a publicly traded company. These plans are generally set up directly with the company or are administered through a third party transfer agent. Using a direct stock purchase plan has advantages over both traditional and online discount brokers. First, these plans avoid sometimes costly commissions and fees charged by brokerage firms. Another important benefit of using a DSPP is the passive investing opportunities that come with them.

How To Buy Stocks: Complete Field Guide for Investors

Company Filings More Search Options. Many companies allow you to buy or sell shares directly through a direct stock plan DSP. You can also have the cash dividends you receive from the company automatically reinvested into more shares through a dividend reinvestment plan DRIP. Direct Stock Plans — Some companies allow you to purchase or sell stock directly through them without your having to use or pay commissions to a broker. But you may have to pay a fee for using the plan's services. Some companies require that you already own stock in the company or are employed by the company before you may participate in their direct stock plans. You may be able to buy stock by investing a specific dollar amount rather than having to pay for an entire share. In that case, you could have your checking account debited on a regular basis to make investments in the plan. Some plans require a minimum amount of investment or require you to maintain specific minimums in your account.

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page.

Federal government websites often end in. The site is secure. Stocks are a type of security that gives stockholders a share of ownership in a company.

How Can I Purchase Stock Directly From a Company?

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on TheTokenist. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid. The prevalence of the internet has made it possible to trade any time of the day no matter where in the world you are. Most of the time, if you want to buy stocks, you have to go through a stockbroker. However, it is perfectly possible to get into stock trading on your own without a stockbroker. Today we are going to show you where to buy stocks and how to do it, covering online brokerage firms , what stockbrokers do, and how you can buy and sell stock with or without a stockbroker. If you have spent any time looking at stocks or talking to your friends who dabble in stocks, you likely have heard of brokerage accounts. A brokerage account is a specific kind of account that lets you purchase and sell investments. You first deposit an amount of money into your brokerage account and then you can buy and sell securities. Brokerage accounts are usually run by brokerage firms or investment companies.

Advantages & Disadvantages of Stocks Directly From the Company vs. a Broker

Instead, all you need to do is push a button to trade stock. You can bypass a broker and buy stock by using a transfer agent, but the costs can be high. You can use direct purchase plans, or stock purchase plans, but you need to be an employee of the company. However, there are still serious obstacles that can bar the average person or retail investor from the stock market. Transaction fees, hidden fees, and trading fees can eat up all or most of your profit, for example. In addition, brokerages, exchanges, and regulators often place serious restrictions on individual traders. Thus, always research stock purchases carefully before entering the market. A little knowledge can help you avoid high fees and ridiculous restrictions. In the modern world, you will not need a broker to buy stock. However, most people will need a brokerage account to buy and sell stocks.